Blue Bird closes $600M credit facility, replacing $250M prior deal

Blue Bird Corporation (Nasdaq: BLBD) has closed a new $600 million senior secured credit facility, replacing its existing $250 million facilities and extending the maturity date from November 2028 to September 2031, according to a press release from the company.

The new credit agreement consists of a $300 million revolving credit facility and a $300 million delayed draw term loan. Borrowings under the delayed draw term loan are available for up to 24 months after closing, or until the full $300 million is drawn, and may be used to refinance existing debt and to fund capital projects, research and development, and working capital. At closing, Blue Bird had approximately $86 million in carry-over debt drawn under the new facilities and more than $670 million in available liquidity.

The new agreement lowers the interest rate margin to SOFR plus 1.25% to 2.25%, based on leverage, compared with SOFR plus 1.75% to 3.25% under the prior facilities, and eliminates a previous 0.10% credit spread adjustment. The maximum total net leverage ratio rises to 3.25x, with a temporary 0.50x step-up for four quarters following a qualifying acquisition of $75 million or more.

The accordion feature expands to the greater of $250 million or 1.0x trailing twelve-month EBITDA, plus additional amounts subject to a leverage test.

Bank of Montreal acted as Administrative Agent, Joint Lead Arranger, and Joint Bookrunner. Bank of America, N.A. served as Syndication Agent, Joint Lead Arranger, and Joint Bookrunner. CIBC Bank USA, Fifth Third Bank, N.A., Regions Bank, and TD Bank N.A. served as Joint Lead Arrangers and Joint Bookrunners.

"This refinancing more than doubles our available borrowing capacity, lowers our cost of debt and extends maturity out to 2031," said Razvan Radulescu, Chief Financial Officer of Blue Bird Corporation.

Blue Bird plans to file a Current Report on Form 8-K with the Securities and Exchange Commission with additional details on the transaction.

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