Harland gets five-year asset-based revolver at Libor plus 175-225 bps

By Susanna Moon

Chicago, Feb. 22 - Harland Clarke Holdings Corp. obtained a five-year senior secured asset-based revolving credit facility at Libor plus 175 basis points to 225 bps based on the average excess availability for the prior fiscal quarter.

The borrowing base at closing, based on Dec. 31 balances, was $56.7 million. The revolver includes an up to $30 million subfacility for letters of credit and an up to $10 million subfacility in the form of short-term swingline loans.

The company's direct parent, CA Acquisition Holdings, Inc. and some of its other domestic subsidiaries as guarantors, closed the revolver with Citibank, NA as administrative agent and collateral agent, according to an 8-K filing with the Securities and Exchange Commission.

The company terminated its $100 million revolving credit facility Wednesday.

The revolver provides for the lesser of $80 million and a calculated borrowing base consisting of:

• 85% of eligible receivables less unearned revenue plus

• The lesser of (i) 85% of the orderly liquidation value of eligible inventory and (ii) 70% of eligible inventory (in each case, at the lower of book value and market), minus eligibility reserves in effect at the time.

The revolver is guaranteed by CA Acquisition Holdings, Inc., Harland Clarke Holdings Corp. and some of its domestic subsidiaries and secured by a lien on substantially all of the assets of such loan parties, including inventory, receivables, equipment, intellectual property and real property.

The obligations under the revolver are secured by a first-priority lien on inventory, receivables, payment intangibles and other current assets and other assets, and second-priority liens on the remaining collateral, subject to the first-priority liens securing the company's non-extended and extended term loans and senior secured notes.

The revolving facility will terminate on Feb. 20, 2018, with springing maturities 91 days prior to the scheduled maturity date of the company's non-extended and extended senior secured term loans, senior notes and senior secured notes, all of which mature prior to the termination date of the revolving facility.

The commitment fee ranges from 37.5 bps to 50 bps.

Harland Clarke is a San Antonio-based provider of integrated payment, marketing and security services and retail products.

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