Varex Announces Closing of Revolving Credit Facility of $155 Million
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The new revolving credit agreement for Varex Imaging Corporation, with a principal amount of up to $155 million, offers a flexible financial tool that can be used to support the company's operational and strategic needs. The decision to switch from the previous asset-based credit facility to this new arrangement suggests a strategic move to improve liquidity management. By choosing Zions Bancorporation as the lead arranger, Varex may benefit from favorable terms due to Zions' expertise and reputation in the financial sector.
This shift indicates Varex's proactive approach to capital management, which may be positively perceived by investors and analysts. The availability of funds for working capital and debt repayment can provide a cushion against market volatility and enable the company to pursue growth opportunities or weather downturns without diluting shareholder value through equity financing. However, it is important to monitor the terms of the credit facility, such as interest rates and covenants, as they can impact the company's financial flexibility and cost of capital.
From a market perspective, Varex Imaging's announcement of the new credit facility could signal a broader strategic initiative. It may hint at upcoming investments in technology, potential acquisitions, or expansion efforts that require a robust financial backing. Market participants often view such credit arrangements as a vote of confidence from lending institutions, which can translate into a more favorable outlook for the company's stock.
It's important to assess how this financial maneuver aligns with industry trends where companies are increasingly leveraging credit facilities for agility rather than relying solely on cash reserves or equity financing. The health of the balance sheet post-arrangement will be a key factor for investors to watch, as it affects the company's risk profile and its ability to capitalize on market opportunities.
Entering into a senior secured revolving credit agreement is a significant financial move that reflects on the company's creditworthiness and its relationship with lenders. The termination of the existing credit agreement in favor of the new RLOC Facility may be aimed at optimizing the company’s debt structure. It's important to analyze the credit terms, such as the interest rate spread, commitment fees and financial covenants, which will determine the cost-effectiveness of this facility.
The impact on Varex's leverage ratios and interest coverage ratios should be considered, as these are key indicators of financial health in the eyes of debt holders. Investors in the debt market will be keen to understand how this new facility affects the company's ability to meet its financial obligations, especially in an environment where interest rates may fluctuate.
“We are pleased to have successfully closed the revolving credit facility,” said Sam Maheshwari, Chief Financial Officer of Varex Imaging Corporation. “The additional liquidity provides funds to address working capital and other general corporate purposes, including potential repayment of debt,” added Maheshwari.
Additional information concerning the RLOC Facility is disclosed in Varex’s Form 8-K filed with the Securities and Exchange Commission today, March 27, 2024.
About Varex
Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors and other image processing solutions that are key components of X-ray imaging systems. With a 70+ year history of successful innovation, Varex’s products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers incorporate the company’s X-ray sources, digital detectors, connecting devices and imaging software in their systems to detect, diagnose, protect and inspect. Headquartered in
About Zions Bancorporation
Zions Bancorporation, N.A. is one of the nation's premier financial services companies with 2023 net revenue of
Forward-Looking Statements
This news release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning how Varex may use the funds in the future, or whether or when it might draw down on the RLOC Facility, or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results and the outcome and timing of certain events to differ materially from those projected or management’s current expectations. Any forward-looking statement made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Varex assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.
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Christopher Belfiore
Director of Investor Relations
Varex Imaging Corporation
801.973.1566 | christopher.belfiore@vareximaging.com
Source: Varex Imaging Corporation
FAQ
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