Generac Completes Refinancing; Investors to Get $5-per-Share Dividend

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Generator maker Generac announced this morning it had completed the refinancing of its senior secured term loan credit facility and, as it previously promised, will use part of the proceeds to pay investors a special dividend of $5.00 per share, payable on June 21 to stockholders of record on June 12. 

Generac said the refinancing resulted in it incurring $1.2 billion of senior secured term loans that replaced its prior term loan facilities. The new term loans will mature in 2020, with interest initially accruing at LIBOR plus 2.75% with a LIBOR floor of 0.75%. Moreover, beginning in the second quarter of 2014, the spread to LIBOR of the new term loans can be reduced to LIBOR plus 2.50% if its net debt leverage ratio falls below 3.0 times.

Generac also obtained a one-year extension to the maturity date of its existing $150 million senior-secured, asset-based revolving credit facility. The extended revolving credit facility will terminate in 2018, but will continue to accrue interest on drawn proceeds using an "availability-based pricing grid" starting at LIBOR plus 2%.

As previously announced, the generator maker intends to use approximately $342 million of the proceeds from the new term loans to fund a special cash dividend to its stockholders of $5.00 per share. The company does not pay a regular dividend on its common stock. The remaining funds will be used for general corporate purposes and to pay related financing fees and expenses.


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