MILWAUKEE--(BUSINESS WIRE)--Aug. 21, 2013--
Rexnord Corporation (“Rexnord”) (NYSE:RXN) announced today that its
wholly-owned subsidiaries, RBS Global, Inc. and Rexnord LLC (together,
the “Borrowers”), entered into an amendment to their senior secured
credit facilities providing for a new 7-year term loan (the “Refinancing
Term Loan”) in an aggregate amount of approximately $1.95 billion, in
addition to their existing $265 million revolving credit facility. The
Refinancing Term Loan matures on August 21, 2020, and is subject to a
leveraged-based pricing grid, with initial pricing of LIBOR (subject to
a 1.00% floor) plus 3.00%. The proceeds of the Refinancing Term Loan
were used to purchase, redeem or discharge all of the Borrowers’
outstanding 8½% Senior Notes due 2018 (the “Notes”), refinance the
Borrowers’ previously existing senior secured term loan and pay related
fees and expenses.
At prevailing interest rates and subject to a 1.00% LIBOR floor in the
Refinancing Term Loan, Rexnord expects the refinancing will reduce
annual pre-tax interest expense by approximately $41 million to $48
million depending on the timing and amount of any interest rate hedging
strategies management may pursue. Although the Borrowers will not incur
prepayment penalties as a result of the refinancing of the senior
secured credit facilities, they will incur a pre-tax charge of
approximately $130 million to $135 million during the second quarter of
fiscal 2014 due to the prepayment premiums related to the Notes and
non-cash write-off of debt issuance costs associated with the
refinancing.
Todd A. Adams, President and Chief Executive Officer, commented, “We are
pleased to have successfully completed our refinancing. The benefits of
the transaction include a significant improvement in our free cash flow
and $0.25 to $0.30 of annualized earnings per share accretion, as well
as extending our debt maturity profile to 2020. We will update our
fiscal 2014 outlook, inclusive of this transaction, when we announce our
second quarter earnings.”
About Rexnord
Headquartered in Milwaukee, Wisconsin, Rexnord is comprised of two
strategic platforms, Process & Motion Control and Water Management, with
approximately 7,300 employees worldwide. The Process & Motion Control
platform designs, manufactures, markets and services specified,
highly-engineered mechanical components used within complex systems. The
Water Management platform designs, procures, manufactures and markets
products that provide and enhance water quality, safety, flow control
and conservation. Additional information about Rexnord can be found at www.rexnord.com.
Cautionary Statement on Forward-Looking Statements
Information in this release may involve outlook, expectations, beliefs,
plans, intentions, strategies or other statements regarding the future,
which are forward-looking statements. These forward-looking statements
involve risks and uncertainties, as well as estimates based on
information that is not yet fully available. All forward-looking
statements included in this release are based upon information available
to Rexnord as of the date of the release, and Rexnord assumes no
obligation to update any such forward-looking statements. The statements
in this release are not guarantees of future performance, and actual
results could differ materially from current expectations. Numerous
factors could cause or contribute to such differences. Please refer to
“Risk Factors” and “Cautionary Notice Regarding Forward-Looking
Statements” in Rexnord’s Form 10-K for the fiscal year ended March 31,
2013 as well as Rexnord’s annual, quarterly and current reports filed on
Forms 10-K, 10-Q and 8-K from time to time with the Securities and
Exchange Commission for a further discussion of the factors and risks
associated with the business.
Source: Rexnord Corporation
Rexnord Corporation
Mark Peterson
Senior Vice President and
Chief Financial Officer
414.643.3739