Bloomberg News

Colfax to Borrow $1.8 Billion to Fund Charter Acquisition

September 15, 2011

(Updates with loan details in second paragraph.)

Sept. 15 (Bloomberg) -- Colfax Corp., a maker of pumps and valves buying Charter International Plc, is seeking $1.8 billion of term loans to support the acquisition.

Deutsche Bank AG and HSBC Holdings Plc are arranging the transaction, which includes a $900 million term loan B, $900 million in term loan A pieces and $300 million in revolving bank lines, according to a regulatory filing today.

Colfax, based in Fulton, Maryland, outlined interest of four percentage points more than the London interbank offered rate on the term loan B and the lending benchmark will have a 1.25 percent minimum, according to the filing.

The term loan A and revolver would pay three percentage points more than Libor, based on leverage, or debt to earnings before interest, taxes, depreciation and amortization, according to the filing.

Colfax agreed to buy Europe’s biggest welding equipment maker for 1.53 billion pounds ($2.42 billion), the company said in a Sept. 12 statement.

A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. A term loan A is sold mainly to banks. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

--Editors: Faris Khan, Pierre Paulden

To contact the reporter on this story: Krista Giovacco in New York at

To contact the editor responsible for this story: Faris Khan at

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