Franchise Group subsidiaries amend credit facilities

By Marisa Wong

Los Angeles, Oct. 4 – Franchise Group, Inc. amended on Oct. 2 its credit agreement dated May 16 with CIBC Bank USA as administrative agent to reduce the total amount of the commitments to $125 million from $135 million and extend the maturity date to Oct. 2, 2022, according to an 8-K filing with the Securities and Exchange Commission.

Franchise Group also reduced the applicable margin for Libor loans to a range of 275 basis points to 350 bps from a range of 300 bps to 400 bps previously. Pricing is based on the leverage ratio.

In addition, the credit agreement was amended to permit dividends and other distributions under some conditions.

The amendment also eliminated a negative covenant that prohibited the company from incurring some types of debt and liens.

Indirect subsidiary Franchise Group Intermediate L 2, LLC is borrower under the credit agreement, and indirect subsidiary Franchise Group Intermediate L 1, LLC is a guarantor.

Separately, according to the 8-K filing, Franchise Group subsidiaries Buddy’s Newco, LLC and Buddy’s Franchising and Licensing LLC amended on Sept. 30 their credit agreement dated July 10 with Kayne Solutions Fund, LP as administrative agent.

The amendment to the Buddy facility updates the agreed consolidated EBITDA figures for Sept. 30, 2018, Dec. 31, 2018, March 31, 2019 and June 30 and clarifies the circumstances under which acquisitions may be given pro forma effect in the calculation of consolidated EBITDA.

Formerly Liberty Tax, Inc., Franchise Group offers tax preparation services. The company is based in Virginia Beach, Va.

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