Liberty Tax gets $135 million revolver due 2020 at Libor plus 350 bps

By Sarah Lizee

Olympia, Wash., May 16 – Liberty Tax, Inc. entered into a credit agreement on Thursday with Citizen Bank, NA as administrative agent, providing for a $135 million senior revolver due May 31, 2020, according to an 8-K filing with the Securities and Exchange Commission.

Citizen Bank, Citizen Bank, CIBC and First Tennessee Bank, NA are joint lead arrangers and bookrunners. CIBC and First Tennessee Bank are co-syndication agents.

Interest is Libor plus 300 basis points to 400 bps, based on the consolidated leverage ratio. There is an unused fee that ranges from 25 bps to 50 bps, also based on the consolidated leverage ratio.

As of Thursday, interest is Libor plus 350 bps, and the unused fee is 37.5 bps.

The revolver has a $10 million sub-facility for letters of credit and a $20 million swingline loan sub-facility.

The credit agreement replaces the company’s prior credit facility with SunTrust Bank as administrative agent that expired April 30. The company was required to pay off the term loan with an outstanding principal balance of about $12 million with its available cash on hand. There was no outstanding balance on the revolver under the prior credit facility at maturity.

The new revolver was undrawn at closing.

Financial covenants include a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio, each of which will be tested at the end of each fiscal quarter, and a minimum consolidated net worth ratio tested at the end of each fiscal year.

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