Acasta Enterprises enters $150 million two-year credit agreement

By Wendy Van Sickle

Columbus, Ohio, May 25 – Acasta Enterprises Inc. entered into a $150 million credit agreement May 14 with Acasta Funding, LP and certain other lenders and U.S. Bank NA as administrative agent, according to a material change report.

Also, in connection with the new credit agreement, an existing credit agreement with Apollo Health and Beauty Care Partnership, Apollo Laboratories Inc. and JemPak Corp. as borrowers and Canadian Imperial Bank of Commerce as agent was amended to reduce revolving and term commitments.

Lenders under the new credit facility include affiliates of Douglas Brennan and Richard and Charles Wachsberg, which provided $25 million.

The credit facility is available to be drawn for 12 months following satisfaction of some conditions precedent to initial funding and matures on the second anniversary of the effective date.

Interest is Libor plus a margin ranging from 775 basis points to 1,150 bps, depending on the length of time the loan is outstanding.

Acasta will pay an exit fee of $4.5 million if the credit facility is repaid in the first year and $9 million if it is repaid thereafter.

Proceeds will be used to make an investment of up to $100 million in Stelloan Investment Co. I DAC and to make direct and indirect investments in Stellwagen Group Ltd. and its subsidiaries to fund their short-term on-balance sheet aircraft trading and working capital.

Acasta must comply with a leverage ratio covenant.

The credit facility is guaranteed by Stellwagen Acquisition Corp. and Stellwagen and is secured by a first ranking charge over all personal property of Acasta as well as a pledge of all equity interests owned by Acasta and each of the guarantors.

The amendment to the existing credit facility reduces availability under the revolving tranche to $35 million from $50 million and the term loan tranche to $65 million from $100 million. The full term loan amount has been drawn.

Additionally, the amendment replaces the existing restrictions on Acasta’s ability to incur indebtedness with a total debt ratio maintenance covenant.

Toronto-based Acasta is a special purpose acquisition corporation.

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