Callaway amends facility for $230 million U.S., Canadian, U.K. loans

By Marisa Wong

Madison, Wis., June 26 – Callaway Golf Co. entered into a third amendment to its second amended and restated loan and security agreement on June 23 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amended ABL facility provides a senior secured asset-based revolving credit facility of up to $230 million, comprising a $160 million U.S. facility, of which $20 million is available for letters of credit; a $25 million Canadian facility, of which $5 million is available for letters of credit; and a $45 million U.K. facility, of which $2 million is available for letters of credit, in each case subject to borrowing base availability under the applicable facility.

Pricing is based on the company’s availability ratio. The applicable margin ranges from 175 basis points to 225 bps.

In addition, the ABL facility provides for monthly fees ranging from 25 bps to 37.5 bps of the unused portion of the facility, depending on the monthly average daily balance of revolver loans and stated amount of letters of credit relative to lenders’ commitments.

Amounts borrowed may be repaid and reborrowed from time to time. The entire outstanding principal amount is due and payable at maturity on either (a) the date that is six months prior to the maturity of the company’s 3.75% convertible senior notes due Aug. 15, 2019 or (b), if a qualifying refinancing of the company’s 3.75% convertible notes has occurred at least six months prior to their maturity, then June 23, 2019.

There is a $150 million accordion feature.

The company will be subject to compliance with a fixed-charge coverage ratio covenant.

Callaway is a Carlsbad, Calif.-based manufacturer and seller of golf clubs, golf balls and golf accessories.

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