Utz Brands subsidiaries get $88.14 million 10-year senior secured loan

By Marisa Wong

Los Angeles, Oct. 12 – Utz Brands, Inc. subsidiaries Utz Quality Foods, LLC, Kennedy Endeavors, LLC and Condor Snack Foods, LLC entered into a loan agreement on Wednesday with City National Bank as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The lenders provided a senior secured term loan with a total principal amount of $88.14 million, amounting to net proceeds of roughly $85 million after transaction fees and expenses.

The loan has a 10-year maturity and amortizes about $3.5 million in principal annually, with a bullet repayment due at maturity.

Obligations under the loan agreement are secured by a portfolio of 17 of the real estate assets owned by the borrowers, representing the majority of their estate assets, including manufacturing plants, warehouses and offices; these assets were previously unencumbered.

Concurrent with the closing of the loan, Utz Quality entered into an interest rate swap transaction to fix the effective interest rate at about 6%.

The loan contains a single financial maintenance covenant consisting of a fixed-charge coverage ratio that is tested quarterly only during a covenant trigger period consistent with Utz Quality’s existing ABL credit agreement dated Nov. 21, 2017 with Bank of America, NA as administrative agent and collateral agent.

Utz is a Hanover, Pa.-based manufacturer of savory snacks.

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