Skyline Champion obtains $200 million revolving credit facility

By Rebecca Melvin

Concord, N.H., July 13 – Skyline Champion Corp. and subsidiary Champion Home Builders, Inc. entered into an amended and restated credit agreement on July 7 for a $200 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Wells Fargo Bank, NA is administrative agent and collateral agent for the facility.

The revolver includes a $45 million letter-of-credit sub-facility.

It may be used for working capital, capital expenditures, permitted acquisitions, permitted restricted payments and other general corporate purposes and matures July 7, 2026. It has no scheduled amortization.

The interest rate adjusts based on the consolidated total net leverage ratio of the company and its subsidiaries. For the first quarter, the annual interest rate will be Libor plus 112.5 basis points. Thereafter, the interest rate will adjust based on the consolidated total net leverage ratio from a high of Libor plus 187.5 bps when the consolidated total net leverage ratio is equal to or greater than 2.25x, to a low of Libor plus 112.5 bps when the consolidated total net leverage ratio is below 0.5x.

In addition, there is a 15 bps commitment fee for the first quarter. Thereafter, the borrower will pay a commitment fee ranging between 15 bps and 30 bps, depending on the consolidated total net leverage ratio of the unused commitments.

The facility is guaranteed, on a joint and several basis, by the company, the borrower, and each of the company’s material wholly-owned U.S. subsidiaries and is secured by a first priority security interest in substantially all of the assets of the company, the borrower, and subsidiary guarantors, with certain exceptions.

The borrower may request one or more increases in the commitments up to an unlimited additional amount if the consolidated total net leverage ratio as of the last day of the most recently ended test period does not exceed 3.25x.

In addition, the credit agreement includes (i) a maximum consolidated total net leverage ratio of 3.25x, subject to an upward adjustment to 3.75x for the subsequent four fiscal quarters upon the consummation of a material acquisition, provided there are at least two fiscal quarters not subject to such upward adjustment before a subsequent material acquisition may result in a subsequent upward adjustment, and (ii) a minimum interest coverage ratio of 3x.

Lead arrangers and joint bookrunners of the amended and restated credit agreement are Wells Fargo Securities LLC, Citizens Bank NA and RBC Capital Markets.

Formerly known as Skyline Corp., Skyline Champion is a manufactured housing company based in Elkhart, Ind.

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