General Cable Corporation (BGC) recently increased its existing $700 million Senior Secured Credit Facility to $1.0 billion, and the maturity date was also extended to 2018.
The company’s Senior Secured Credit Facility is an asset-based revolving credit facility supporting its business requirements in North America at present. This $300 million increase will also include a part of General Cable’s European assets, thereby creating a single facility for its businesses in both North America and Europe. However, the other terms of the credit facility remain unchanged.
This revised credit facility is expected to make the company’s financial position substantially flexible to support its capital structure and operations across the world, provided the minimum availability and fixed coverage requirements are met. The increased Senior Secured Credit facility will also help support the day to day business activities as the company intends to utilize portions of this credit facility to issue Letter of Credit.
The new credit facility will be secured by the company’s U.S., Canadian and European subsidiaries. Further, some of the intangible and tangible assets and properties from the businesses of U.S., Canada and Europe will be termed as their first priority security.
Management expects this amendment in credit facility to provide liquidity for supporting the working and other capitals required, as the rates and terms for the extended maturity profile are in line with market expectations. This is expected to leverage the company’s growth opportunities and the share repurchase programs along with the quarterly dividends.
Headquartered in Highland Heights, KY, General Cable is engaged in the development, design, manufacture, marketing, and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty, and communications markets.
General Cable currently has a Zacks Rank #4 (Sell). Other stocks in the industry worth buying at the moment are Encore Wire Corp. (WIRE), which holds a Zacks Rank #1 (Strong Buy), Smith AO Corp. (AOS) and Belden Inc. (BDC), both having a Zacks Rank #2 (Buy).