Proceeds from this action will be used to pay down certain outstanding amounts under its senior credit facility and for general corporate purposes.
Terex said it intend to offer and sell these securities under the company’s existing shelf registration statement filed with the Securities and Exchange Commission in July 2007 and amended on 6 November, 2007.
The company also announced that it has reached an agreement on an amendment to its bank credit facility, with the effectiveness of the amendment being conditional on the successful completion of the above capital markets transactions.
In accordance with the amendment, Terex will reduce its domestic revolving credit commitments under the credit facility by USD150m, prepay approximately USD58m principal amount of its term loans under the credit facility and increase the interest rates charged under its credit facility. The amendment will also eliminate certain existing financial covenants dealing with the company’s consolidated leverage ratio and consolidated fixed charge coverage ratio, and instead require the company to maintain liquidity of not less than USD250m on the last day of each fiscal quarter through 30 June, 2011, and thereafter maintain a specified senior secured leverage ratio.
The amendment also provides the company added flexibility in various restrictive covenants; limits the company’s ability under certain circumstances to repurchase stock, pay dividends or redeem debt; and requires the company to provide certain collateral to secure its obligations under the credit facility.
