Malibu Boats restates agreement for revolver, $80 million term loan

By Marisa Wong

Madison, Wis., April 2 – Malibu Boats, Inc.’s indirect subsidiary, Malibu Boats, LLC, entered into an amended and restated credit agreement on Thursday for an $80 million term loan and up to $25 million revolver, according to an 8-K filing with the Securities and Exchange Commission.

SunTrust Robinson Humphrey, Inc. is the lead arranger and bookrunner, and SunTrust Bank is the administrative agent, swingline lender and issuing bank.

The credit agreement restates Malibu Boats’ existing credit agreement dated July 16, 2013.

The restated facility matures on April 2, 2020.

The borrower may ask lenders to increase the amount available under the revolver by, or obtain incremental term loans of, up to $50 million.

Proceeds of the term loan will be used to fund a portion of the company’s modified Dutch auction tender offer to repurchase for cash shares of its class A common stock and to refinance the loans under the existing credit agreement.

Borrowings bear interest at Libor plus an applicable margin ranging from 200 basis points to 275 bps, based on the company’s consolidated leverage ratio.

The borrower will also be required to pay a commitment fee for the unused portion of the revolver, which will range from 25 bps to 40 bps, depending on the consolidated leverage ratio.

The credit agreement permits prepayment of the term loan without any penalties. The term loan is subject to quarterly installments of $1.5 million per quarter until March 31, 2016, then $2 million per quarter until March 31, 2019 and $2.5 million per quarter after that.

The credit agreement is also subject to prepayments from proceeds received from asset sales and recovery events and from excess cash flow. In addition, the borrower is required to repay the term loan with any proceeds from the $80 million term loan that are not used for the tender offer, the refinancing of the loans under the prior credit facility or related fees and expenses for the refinancing and the tender offer.

The borrower used about $10 million of the $80 million term loan to pay all outstanding amounts under the previous revolver and $1.1 million to pay fees and expenses related to the restated credit agreement. If the tender offer is fully subscribed, the company does not expect to have any remaining proceeds from the $80 million term loan.

The credit agreement requires compliance with some financial covenants, including a minimum ratio of EBITDA to fixed charges and a maximum ratio of total debt to EBITDA.

Malibu Boats is a designer, manufacturer and marketer of performance sport boats.

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