On Jun 25, 2014, energy engineering and construction services
The Babcock & Wilcox Company
) announced changes in its credit facilities under the Second
Amended and Restated Credit Agreement.
Per the agreement, the credit facility has been increased to $1
billion from $700 million. Babcock & Wilcox stated that it also
has an option to increase this facility by $400 million, which
depends on receiving additional contracts.
The agreement also provided a $300 million term loan facility to
Babcock & Wilcox. Following the closure of the agreement, the
company has already borrowed half the term loan amount and is now
left with $150 million to draw at a later date.
This amended facility brings more good news for Babcock &
Wilcox as it comes with a reduced interest rate and extended
maturity date. The interest rate to be paid on the borrowing
now stands at London Interbank Offered Rate (LIBOR) plus 1.375%,
lower than the earlier rate of LIBOR plus 1.5%. The new rate will
be applicable starting Aug 2014. Moreover, the facility now has
maturity in 2019 against the earlier expiry period of 2017.
Management at Babcock & Wilcox added that this increase in
available credit should facilitate the company's operating and
strategic initiatives and also improve financials.
Headquartered in Charlotte, NC, Babcock & Wilcox is engaged in
providing clean energy technology and services for the nuclear,
fossil and renewable power markets worldwide. It currently carries
a Zacks Rank #3 (Hold), implying that it is expected to perform in
line with the broader U.S. equity market over the next one to three
Meanwhile, one can consider better-ranked players from the same
Blount International Inc.
Barnes Group Inc.
). While Blount International sports a Zacks Rank #1 (Strong Buy),
Barnes Group and Dover Corp hold a Zacks Rank #2 (Buy).
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