RCM Technologies Secures $65.0 Million Loan Agreement with Citizens Bank, N.A.

RCM Technologies, Inc. (NASDAQ: RCMT) and its subsidiaries have recently entered into a Fifth Amended and Restated Loan Agreement with Citizens Bank, N.A., as both lender and administrative agent. The agreement, dated December 3, 2024, supersedes the previous Fourth Amended and Restated Agreement and enhances the total commitment to $65.0 million, with a provision for potential expansion to $85.0 million subject to certain approvals.

This loan agreement, which is set to mature on December 3, 2029, allows the Borrowers to request trade and standby letters of credit. Moreover, borrowings under this agreement are backed by the Company’s assets and the capital stock of its subsidiaries.

The interest rates for borrowings under this agreement will be tied to either the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York plus a margin, or an Alternate Base Rate. The choice between these two alternatives will be made by the Company for each borrowing. The interest rate spread will depend on the ratio of consolidated funded debt to consolidated EBITDA.

Additionally, the Fifth Amended and Restated Loan Agreement includes affirmative and negative covenants, restricting the levels of consolidated leverage and interest coverage among other aspects. Monthly unused facility fees will be applicable, ranging from 20 to 30 basis points based on the ratio of consolidated funded debt to consolidated EBITDA.

In the event of default under the agreement, such as non-payment or breaching specific covenants, the Lender has the right to declare all outstanding amounts due and payable immediately. This summary serves as an overview, with the full details of the agreement outlined in Exhibit 99.1 attached to the Current Report on Form 8-K submitted by the Company.

This recent financial development signifies a strategic move by RCM Technologies to strengthen its financial position and potentially support its future growth initiatives.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read RCM Technologies’s 8K filing here.

About RCM Technologies

RCM Technologies, Inc provides business and technology solutions in the United States, Canada, Puerto Rico, and Europe. It operates through three segments: Engineering, Specialty Health Care, and Life Sciences and Information Technology. The Engineering segment offers a range of engineering services, including project management engineering and design, engineering analysis, engineer-procure-construct, configuration management, hardware/software validation and verification, quality assurance, technical writing and publications, manufacturing process planning and improvement, and 3D/BIM integrated design.