Blue Bird replaces US$250m facilities with US$600m credit package as liquidity tops US$670m

US school-bus manufacturer Blue Bird has closed a US$600m senior secured financing package, replacing US$250m of existing facilities and extending its debt maturity to September 2031 as the company increases investment in manufacturing and growth.

The new structure comprises a US$300m revolving credit facility and a US$300m delayed-draw term loan.

That increases headline committed capacity by US$350m, or 140%, compared with the facilities it replaces.

The delayed-draw tranche can be accessed for up to 24 months after closing, or until the entire US$300m is drawn. Blue Bird said proceeds may be used to refinance existing debt and primarily finance capital projects, research and development and working-capital requirements.

Around US$86m of existing debt was carried into the new facilities at closing. The company reported total available liquidity of more than US$670m following the refinancing.

BMO acted as administrative agent, joint lead arranger and joint bookrunner. Bank of America was syndication agent, joint lead arranger and joint bookrunner, while CIBC Bank USA, Fifth Third Bank, Regions Bank and TD Bank also acted as joint lead arrangers and joint bookrunners.

The maturity has been pushed from November 2028 to September 2031.
For Blue Bird, the structure separates immediately available revolving liquidity from longer-term capital that can be drawn as investment requirements arise.

That matters because the US$300m delayed-draw facility should not be interpreted as US$300m already funded. Availability extends for two years and the company can draw against it as required, subject to the credit agreement.

Blue Bird manufactures low- and zero-emission school buses and has been expanding production as public and private operators replace ageing fleets and invest in alternative-power vehicles.

The new financing therefore gives the company substantially greater liquidity capacity without requiring it to draw the entire facility at closing.

For working-capital lenders, the deal is also a reminder that headline facility size does not necessarily equal current borrowing. The more meaningful structural change is the combination of a doubled revolver, an additional delayed-draw tranche and a maturity pushed three years further into the future.