The Gorman-Rupp Company announced the completion of a series of transactions to refinance its debt. These transactions are expected to reduce interest expense, and will extend and stagger the Company?s debt maturities. Summary: Upsized, amended and extended the existing Senior Term Loan Facility to $370.0 million; Amended and extended the existing $100.0 million revolving Credit Facility; Issued $30.0 million of new 6.40% Senior Secured Notes due 2031; and Retired the existing $90.0 million unsecured Subordinated Credit Facility.

Loans under the upsized, amended and extended Amended and Restated Senior Secured Credit Agreement will initially accrue interest at an annual rate of Adjusted Term SOFR plus 2.25%, subject to an improved leverage based pricing grid. Amortization is payable quarterly on the term loans with the balance due on a new maturity date of May 31, 2029, which was extended from May 31, 2027. The maturity date for the existing $100.0 million revolving Credit Facility, which remained at a zero balance following the refinancing, was similarly extended to May 31, 2029.

The Company privately placed $30.0 million aggregate principal amount of new Senior Secured Notes which accrue interest at a fixed annual rate of 6.40%, with interest paid semi-annually and the principal due in full on May 31, 2031. The proceeds from the upsized Amended and Restated Senior Secured Credit Agreement and the issuance of the new Senior Secured Notes, as well as $10.0 million of cash on hand, were used to retire the Company?s $90.0 million unsecured Subordinated Credit Facility. The retired Subordinated Credit Facility had been accruing interest at an annual rate of Adjusted Term SOFR plus 9.10% and was scheduled to mature on December 1, 2027.

The combined transactions are expected to reduce annual interest expense by approximately $7.0 million, subject to changes in the underlying interest rates. In the second quarter of 2024, the Company will record a $1.8 million prepayment fee related to the early retirement of the unsecured Subordinated Credit Facility and will expense approximately $1.3 million of transaction related fees. In addition, the Company will record a non-cash charge of approximately $4.4 million to write-off unamortized previously deferred transaction fees related to both the unsecured Subordinated Credit Facility and a portion of the existing Senior Term Loan Facility.