Tuesday, September 03, 2024
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Flexibility. On Friday, NN filed an 8-K disclosing some amendments to its term loan and ABL agreements. In essence, the amendments to each will provide the Company with additional financial flexibility, in our view. While there does not appear to be any change in interest rates, a reduction in rates is a long-term goal of management.
Term Loan. The amendment raises the amount of the Company’s allowable indebtedness – incurred in connection with the purchase or lease of fixed assets – from $20 million to $40 million, provided that no more than $26.95 million is used with respect to any sale and leaseback transaction. In addition, the amendment requires the Company to use the net cash proceeds obtained in connection with any future sale and leaseback transactions to prepay any outstanding principal indebtedness under the term loan.
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