Analyst: Brunswick’s new credit will calm fears

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Brunswick Corp.’s new $400 million revolving credit facility should help calm liquidity fears, according to an analyst who covers the company.

“Although the company does not have any outstanding borrowings on this facility, the amendment provides added financial flexibility,” wrote Edward Aaron, of RBS Capital Markets.

“Clearly business trends remain extremely difficult, and results are likely to be very poor over the next few quarters. Nevertheless, we believe the stock continues to discount excessive liquidity risk and should therefore react favorably to this news,” he added.

Brunswick was trading at $3.63 a share this morning. It closed Monday at $3.85. Its 52-week high and low are $19.63 and $1.82 respectively.

As part of the amended agreement with its lenders, Brunswick’s facility was converted into a secured asset-based facility. The facility contains a minimum fixed-charges coverage covenant, which is effective when borrowings are within $60 million of the total borrowing capacity available under the facility.


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