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Duluth enters into $130 million five-year credit agreement with BMO
By Sarah Lizee
Olympia, Wash., May 22 – Duluth Holdings Inc. entered into an up to $130 million five-year credit agreement on Thursday, according to an 8-K filing with the Securities and Exchange Commission.
BMO Harris Bank NA is the administrative agent, swingline lender and letter-of-credit issuer. BMO Capital Markets Corp. is the lead arranger and bookrunner.
The credit agreement is comprised of an $80 million revolving credit facility and a $50 million delayed-draw term loan, both scheduled to mature on May 17, 2023.
The revolver has a sublimit for the issuance of standby and commercial letters of credit in an amount equal to the lesser of $5 million or the revolving credit commitments, as well as a sublimit for swingline loans in an amount equal to the lesser of $10 million or the revolving credit commitments.
Borrowings bear interest at Libor plus a margin that ranges from 125 basis points to 200 bps, depending on the rent-adjusted leverage ratio.
The non-use fee for the revolver ranges from 15 bps to 30 bps, depending on the rent-adjusted leverage ratio, and the non-use fee for the delayed-draw term loan is 30 bps.
In addition to scheduled repayments, the credit agreement requires mandatory prepayments of 100% of the net proceeds received by the company from any sales or issuances of debt securities by the company or any sale or disposition of assets more than $500,000 during any fiscal year and insurance and condemnation proceeds not otherwise reinvested.
Proceeds will be used to refinance existing debt, to finance working capital and capital expenditures and for other general corporate purposes.
In connection with the closing of the new credit agreement, the company’s second amended and restated loan agreement dated Oct. 7, 2016 with BMO was terminated on Thursday.
The Belleville, Wis.-based company sells casual wear, workwear and accessories for men and women under the Duluth Trading brand.
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