Aeroflex Holding Corp
), a leading global provider of microelectric components,
recently announced that its wholly-owned subsidiary, Aeroflex
Incorporated, has made certain amendments in its senior secured
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With the amendment, Aeroflex has increased its outstanding loan
by $6million to $612 million and extended its tenure by 18 months
to Nov 2019. The company has also removed its leverage ratio
(total debt/ adjusted EBITDA) covenant from the agreement. Also,
the amendment has reduced the effective interest payable by the
company on its outstanding loan by 1.25%. Additionally, the
amendment has reduced the available amount under the revolving
credit facility from $75 million to $57.1 million.
The amendments in credit facility will likely result in annual
interest expense savings of about $7.3 million or 5 cents per
share after tax in exchange for a one-time fee and expenses
totaling $4 million.
Aeroflex has repaid around $120 million of the term loan with
cash on hand from operations over a period of two years and
intends to use the interest savings through the current amendment
to reduce its debt burden. As on Mar 31, 2013, the company had
net cash of $43 million from its operating activities.
Aeroflex manufactures various components and equipment for
diverse industries like space, avionics, defense, and commercial
wireless communications. It currently retains a Zacks Rank #3
Some other stocks within the industry worth mentioning are
Integrated Device Technology, Inc
OmniVision Technologies, Inc.
), each carrying a Zacks Rank #1 (Strong Buy) and
Freescale Semiconductor, Ltd
), which carry a Zacks Rank #2 (Buy).