Lifetime Brands releases details on $425 million of credit facilities

By Marisa Wong

Morgantown, W.Va., Dec. 29 – Lifetime Brands, Inc. disclosed details of the planned financing for its acquisition of Filament Brands in an 8-K filed Friday with the Securities and Exchange Commission.

The company entered into a commitment letter on Dec. 22 with JPMorgan Chase Bank, NA and Golub Capital LLC.

The company expects to enter into a credit agreement with JPMorgan as administrative agent for a $150 million senior secured asset-based revolving credit facility and a credit agreement with JPMorgan as term loan administrative agent and Golub Capital as lender for a $275 million term loan facility.

The company intends to use loan proceeds to fund the acquisition, prepay existing Filament debt and to refinance outstanding borrowings under its second amended and restated credit agreement dated Jan. 13, 2014.

Asset-based revolver

The asset-based revolver will have a maturity of five years from closing of the acquisition.

The revolver will include an up to $40 million dollar-equivalent sublimit for foreign currency borrowings. There will be an up to $30 million dollar-equivalent sublimit for domestic letters of credit and an up to $10 million dollar-equivalent sublimit for foreign letters of credit, and up to $15 million will be available for standby letters of credit. There will also be an up to $15 million sublimit for swingline loans.

The facility will be subject to a domestic borrowing base and a foreign borrowing base.

The facility may be increased by up to $50 million through an accordion feature.

Interest will equal Libor plus 150 basis points at closing. After that, the rate will be subject to adjustment based on the company’s total leverage ratio. The applicable margin will range from 125 bps to 175 bps.

The commitment fee ranges from 25 bps to 37.5 bps, depending on the average daily unused amount.

The ABL facility contains a financial covenant requiring maintenance of a minimum fixed-charge coverage ratio of 1.10 to 1.00, triggered if availability is less than the greater of $15 million and 10% of the ABL commitments.

Term loan

The term loan will have a maturity of seven years from closing of the acquisition and require quarterly principal payments of 1% per annum.

The $275 million of initial term loans will be available in a single draw on the closing date.

The facility permits up to $50 million of incremental term loans.

The loan will have typical term loan B provisions and soft call protection at 101 for the first six months.

The term loan is priced at Libor plus 400 bps.

The term loan facility contains no financial covenants.

Closing of the acquisition is expected in the first half of 2018.

Lifetime Brands is a Garden City, N.Y.-based provider of branded kitchenware, tableware and other products used in the home. Filament Brands is a Seattle-based housewares company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.