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MIRAMAR, Fla. - VSE Corporation (NASDAQ: VSEC), a leading provider of aviation aftermarket services with a market capitalization of $2.4 billion, announced the successful refinancing of its debt structure, securing a $300 million Term Loan A and a $400 million revolving credit facility. According to InvestingPro analysis, the company currently appears to be trading above its Fair Value. Both credit lines are set to mature on May 2, 2030, replacing the company’s previous debt arrangements due in October 2026.
The new borrowing terms start with an interest rate at the Secured Overnight Financing Rate (SOFR) plus 175 basis points. This rate is approximately 60 basis points lower than that of the previous facilities. Adam Cohn, VSE’s CFO, highlighted that the refinancing aligns with the company’s transition to a dedicated aviation aftermarket business and will provide the financial flexibility necessary to pursue growth strategies. InvestingPro data shows the company operates with moderate debt levels and maintains strong liquidity with a current ratio of 3.1.
Citizens Bank, N.A. served as the administrative agent, lead-left bookrunner, and joint lead arranger, alongside a syndicate of nine banks. The refinancing is expected to lower VSE’s cost of capital and increase its liquidity, reflecting the company’s strong financial position and the lenders’ confidence in its future prospects.
VSE, headquartered in Florida, focuses on extending the service life and productivity of critical assets in the commercial and business and general aviation (BG&A) aftermarkets. The company offers distribution and repair services, including engine component support and airframe accessory part distribution and repair.
This announcement contains forward-looking statements regarding the expected benefits of the refinancing transactions, which are subject to risks and uncertainties. VSE’s ability to realize these anticipated benefits, such as meeting strategic growth priorities, may be affected by various factors, including increased leverage and other risks detailed in SEC filings.
The information in this article is based on a press release statement from VSE Corporation.
In other recent news, VSE Corporation reported strong fourth-quarter earnings for 2024, surpassing expectations with an earnings per share (EPS) of $0.90 and quarterly revenue of $299 million. This performance marked a 27% increase in revenue, driven primarily by a 45% year-over-year growth in the aviation segment. The company also finalized the sale of its Fleet business, Wheeler Fleet Solutions, to One Equity Partners for up to $230 million, as part of its strategic shift to focus solely on aviation aftermarket services. In a strategic acquisition, VSE purchased Turbine Weld Industries for $50 million, enhancing its repair capabilities for key engine platforms. Analysts at Truist Securities and RBC Capital Markets responded positively to these developments, with Truist raising VSE’s stock price target to $134 and RBC increasing it to $140, both maintaining favorable ratings. The company provided a positive outlook for 2025, projecting significant revenue growth in its aviation segment. These developments reflect VSE’s commitment to expanding its aviation services and strengthening its market position.
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