Unifi increases ABL term loan to $90 million, ups payments, pricing

By Marisa Wong

Madison, Wis., Aug. 29 – Unifi, Inc. entered into a fifth amendment to its senior secured credit facility dated May 24, 2012 with Wells Fargo Bank, NA as agent on Aug. 25, according to an 8-K filing with the Securities and Exchange Commission.

The senior secured facility consists of a revolving credit facility and a term loan. The amendment increases the ABL term loan by $22 million to $90 million and increases the fixed quarterly payments on the term loan to $2,812,000 from $2,125,000.

The interest rate for the term loan was increased to Libor plus an applicable margin of 250 basis points from Libor plus 225 bps.

The amendment also modifies the calculation of the fixed-charge coverage ratio in the credit facility to exclude some capital expenditures and permitted acquisitions through June 30, 2015, subject to a maximum exclusion of $40 million for any consecutive 12-month period.

In addition, the date on which the eligibility of certain collateral is calculated was changed to a date between July 19, 2015 and Dec. 31, 2015, such that the term loan amount can be increased up to $90 million.

The amendment adds a requirement to have a fixed-charge coverage ratio of at least 1.0 to 1.0 during the same period and removes the requirement to hedge interest-rate exposure on funded indebtedness.

In connection with the $22 million increase to the ABL term loan on Aug. 25, amounts outstanding under the revolver were reduced on the following day by a corresponding $22 million.

The net effect of the amendment is to increase the company’s borrowing capacity under the facility by $22 million, which the company may use to fund strategic initiatives, including possible capital expenditures, the filing noted.

Unifi is a Greensboro, N.C.-based producer and processor of multi-filament polyester and nylon textured yarns and related raw materials.

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