ATSG expands revolver

Dino D'Amore
By Dino D'Amore June 2, 2016 17:07

ATSG expands revolver

Air Transport Services Group (ATSG) has obtained commitments for an expansion of the revolver portion of its secured credit facility with a consortium of banks led by SunTrust, and that it has extended the maturity of the entire facility by 12 months.

The changes increase by $100 million, to $425 million, the revolving credit portion of the credit facility with the bank group. Additionally, the facility includes an amortizing term loan which currently has an outstanding balance of $97.5 million.

Quint Turner, Chief Financial Officer of ATSG, said: “We appreciate the continued strong support of our long-time bank group as we invest our capital to meet the growing customer demand for our mid-size freighter assets and support services, while at the same time continuing to repurchase our shares. The responses from our lender group indicated they are willing to provide even greater credit availability beyond our current request, should the need arise.”

Both the revolver and term loan mature in May 2021. Permitted annual share repurchases were increased from $50 million to $75 million, subject to a leverage ratio based on EBITDA as defined under the credit agreement. The leverage limitation is no greater than 2.75 times, up from 2.5 times under the prior agreement, on a trailing 12 months basis. ATSG’s Board of Directors increased its share repurchase authorization to $100 million on May 12, 2016.

The increase in the revolver ceiling also includes a new $100 million accordion feature, under which the limit on revolver credit could increase up to $525 million with approval of the bank consortium.

The variable interest rate structure on the revolver remains unchanged. Rates are affected by LIBOR, plus an interest rate spread that adjusts based on the stated leverage ratio. The revolver interest rate is currently 2.2 percent.

Outstanding debt against the revolver was $240 million at March 31, 2016. The credit facility is secured by certain designated aircraft.

Dino D'Amore
By Dino D'Amore June 2, 2016 17:07