Resideo Technologies announced that the company has completed the refinancing of its senior secured term loan A and term loan B with the net proceeds of a new 7-year, $950 million senior secured term loan B maturing in 2028.
The interest rate on the new term loan B is LIBOR + 225 basis points. The company also entered into a new 5-year, $500 million revolving credit facility. The credit facility matures in 2026 and carries an interest rate that is initially LIBOR + 225 basis points on borrowings but is subject to reduction based upon the company’s leverage ratio.
In connection with the refinancing, Moody’s Investor Service upgraded Resideo’s corporate credit rating to “Ba3”, while Standard and Poor’s affirmed the existing issuer credit rating of “BB” and changed the credit outlook to “Stable” from “Negative”.
On Feb. 16, the company redeemed $140 million of its outstanding senior unsecured notes. The redemption price was 106.125% of par plus accrued and unpaid interest.
“We are pleased with the strong investor interest and resulting terms of a new term loan B and revolving credit facility,” said Tony Trunzo, Resideo’s CFO, in a statement. “Through these transactions we extended the maturities of our debt stack, lowered the annual amortization and added additional liquidity to our balance sheet. Our credit profile has improved as evidenced by the positive actions from the rating agencies. With the completion of this refinancing and our equity offering in November, we have significantly enhanced our financial flexibility as we continue executing on our transformation efforts and positioning Resideo for long-term growth.”
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