LKQ Corp. gets new $1 billion credit facility

Jan. 1, 2020
LKQ Corporation announced that it entered into a definitive credit agreement with several lenders to borrow up to $1 billion. The new facility replaces the company's $750 million facility that would have expired in October 2013.
LKQ Corporation announced it entered into a definitive credit agreement with several lenders to borrow up to $1 billion. The new facility replaces the company’s $750 million facility that would have expired in October 2013.

“The new revolving credit facility and term loan give LKQ additional flexibility to execute our growth plans at attractive rates,” said Joseph Holsten, vice chairman and co-chief executive officer of LKQ Corporation.

The key features of the secured credit facility include:

  • $750 million revolving credit facility with a $300 million multicurrency sublimit
  • $250 million term loan facility
  • Initial pricing on the United States dollar portions of the facility at Libor plus 175 basis points (a 50 basis point reduction relative to the Company’s prior facility) with an undrawn fee of 35 basis points
  • Annual amortization payments on the term loan of 5% in years 1 and 2, 10% in years 3 and 4, and 15% in year 5 with a balloon payment at maturity
  • $400 million accordion feature
  • 5 year term expiring March 25, 2016
John Quinn, executive vice president and chief financial officer said: “In addition to the increased borrowing capacity, we expect the new facility to bring a number of benefits including lower borrowing costs, reduced amortization payouts, more efficient cash management and extending our only major debt maturity to 2016.”

The company indicated the initial use of proceeds will be repayment of the prior credit facility and for general corporate purposes.

The company confirmed that previously issued guidance released on Feb. 24, 2011 did not include the impact of the refinancing. The company anticipates a first quarter 2011 write-off of debt issuance costs of approximately $6 million related to the retired credit facility.

JP Morgan Chase Bank, N.A. acted as administrative agent, Bank of America, N.A as syndication agent, and RBS Citizens, N.A. and Wells Fargo Bank, N.A. as co-documentation agents.

J.P. Morgan Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Inc., RBS Citizens, N.A. and Wells Fargo Securities, LLC acted as joint bookrunners and joint lead arrangers.

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