L.O.T.W. #145 - CPI Aerostructures Increases Firepower with New Revolver and Term Loan Credit Facilities
New $10 million revolver and $10 million term loan provided by Western Alliance Bank refinanced the company's existing BankUnited revolver which had ~$15.8 million outstanding as of Sept 30, 2025.
In December 2025, CPI Aerostructures entered into a new multi-year credit relationship with Western Alliance Bank, transitioning from its prior lender, BankUnited, where the relationship had come under pressure due to defaults and repeated covenant waivers. Lender fatigue and a tightening credit posture ultimately created an opening for Western Alliance to evaluate the business with fresh eyes and structure a new facility offering increased capacity and enhanced flexibility.
👓At a Glance
Borrower: CPI Aerostructures
Lender: Western Alliance Bank
Aggregate Commitment: $20 million
Rate: Variable grid pricing tied to funded leverage
Term: ~60 months
Use of Proceeds: Refinance existing revolving facility which was stepping down and set to mature in November 2026.
Source: SEC 8-K
📷Borrower Snapshot
Sector: Industrials
Subsector: Aerospace & Defense
Ownership: Public (NYSE - CVU); $57.7 million market cap as of Jan. 9, 2026
Commercial Stage: Revenue generating; LTM EBITDA +
Business Overview: CPI Aerostructures specializes in the integration of aerosystems and the structural assembly of aerostructures for fixed wing aircraft, helicopters and airborne Intelligence Surveillance and Reconnaissance (ISR) and Electronic Warfare (EW) pod systems primarily in the U.S. defense market and also the commercial aerospace market.
In addition to its assembly operations, CPI Aero provides engineering, program management, supply chain management, and MRO services. Among the key national security programs that CPI Aero supplies are the E-2D Advanced Hawkeye surveillance aircraft, the F-35 Lightening II fighter jet, F-16V Falcon jet, B-52 Bomber aircraft, T-38 Trainer aircraft, A-10 Thunderbolt attack jet, the UH-60 BLACK HAWK® helicopter, the MH-53/CH-53 variant helicopters, the MH-60S mine countermeasure helicopter, the AH-1Z ZULU attack helicopter, the Next Generation Jammer-Mid Band Electronic Warfare pod, and the MS-110 and Tactical Synthetic Aperture Radar (TacSAR) reconnaissance pods, and the ALMDS mine detection pod. In the commercial aviation market CPI Aero manufactures products for the Gulfstream G650/G700 ultra-large cabin business jet, the Embraer Phenom 300 business jet, and the S-92® helicopter.
⚙️Structure & Terms
Source: SEC 8-K
Structure:
$10 million non-formula revolver
$10 million term loan
term loan amortizes each quarter
$187.5k in 2026
$250.0k in 2027
$437.5k in 2028
$687.5k in 2029
$750.0k in 2030 plus remaining amount at Maturity
Maturity: December 12, 2030
Collateral: First priority security interest in all assets of borrower and guarantor subsidiaries (Welding Metallurgy Inc. and Compac Development Corporation)
Rate: Variable tied to funded leverage
when funded leverage is equal to or below 3.00:1.00 - 1 Month SOFR + 2.50%
when funded leverage is greater than 3.00:1.00 - 1 Month SOFR + 3.00%
Fees:
$100k closing fee
0.40% unused commitment fee
Financial Covenant:
Consolidated Fixed Charge Coverage >1.25x measured quarterly
Funded Leverage Ratio
Close to December 31, 2026 - less than or equal to 3.75:1.00
January 1, 2027 to Maturity - less than or equal to 3.50: 1.00
Solid move switching to Western Alliance after the covenant pressure at BankUnited. The tiered leverage pricing structure actually gives them breathing room to scale without getting hammered on rate if they need to gear up for production spikes on those defense contracts. Seen alot of Tier 2 aerospace suppliers get boxed in by tight covenants right when demand surges, and with the A-10 fleet modernization programs still active this is better timing than the old facility woud've allowed.