Lear Seeks to Increase Revolving Line of Credit to $1 BillionKrista Giovacco
Lear Corp., the auto-parts maker that emerged from bankruptcy in 2009, is seeking to double a revolving credit line to $1 billion.
Proceeds of the revolver and a planned $500 million bond sale will be used for corporate purposes, including redemption of $70 million of notes, the company said today in a regulatory filing.
The actions “further improve our capital structure, increase our financial flexibility and allow us to continue to invest in growing and strengthening our business,” Matt Simoncini, Lear’s chief executive officer, said in the filing.
The Southfield, Michigan-based company’s existing revolving credit, which is due to expire in June 2016, had no borrowings outstanding as of Sept. 29, Lear said in an Oct. 26 regulatory filing. Lear pays interest on drawn portions of the line of credit of between 1.375 percentage points more than the London interbank offered rate and 3 percent more than Libor, depending upon ratings, according to the filing. As of Sept. 29, the debt paid 2.25 percentage points.
Libor is a rate banks say they can borrow in dollars from each other. In a revolving line of credit, money may be borrowed again once it’s repaid.