Horizon Lines lowers ABL facility, to reduce fees, amend terms

By Tali Rackner

Norfolk, Va., April 29 – Horizon Lines, Inc. and Horizon Lines, LLC reduced the maximum size of its ABL facility via agent Wells Fargo Capital Finance, LLC to $80 million from $100 million, according to an 8-K filing with the Securities and Exchange Commission.

The company’s accounts receivable balances decreased due to the closing of its Puerto Rico operations. The decrease resulted in a reduction in the maximum forecast borrowing base below $80 million.

The smaller facility size is expected to reduce Horizon Lines’ fees on unused ABL facility commitments by about $100,000 per year.

In addition to the lower fee, the amendment relaxes the condition that triggers testing the minimum fixed-charge coverage ratio to a minimum excess availability of $10 million from $12.5 million and the condition that triggers weekly borrowing base reporting to $12 million from $14 million.

The April 22 amendment also reduces the letter of credit sub-limit to $20 million from $30 million.

Horizon Lines is a Charlotte, N.C.-based container shipping company.

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