Tandy Brands Closes Facilities with Salus, King Trade
Tandy Brands announced that it entered into a new credit agreement with Salus Capital Partners to provide senior financing up to $29 million. The facility is comprised of a revolving credit facility in the amount of $27.5 million and a term loan facility in the amount of $1.5 million. The facility expires in July 2015.
The facility is secured by a first priority lien on substantially all of the assets of the company and its subsidiaries, excluding certain goods and related accounts receivable financed pursuant to the King Trade facility, for which Salus will have a second priority lien.
The company used the proceeds of the initial advance under the credit facility to repay indebtedness owing to Wells Fargo and to pay fees and expenses incurred in connection with the credit agreement. The company will use the proceeds of future advances under the credit agreement for working capital purposes.
Additionally, the company entered into a master agreement with EPK Financial Corporation, d/b/a King Trade Capital, which provides for a purchase and sale facility with $11.5 million of maximum aggregate amount permitted to be outstanding. The King Trade facility is expected to provide the company with financing to purchase certain inventory related to the company’s holiday 2013 seasonal gifts business.
The King Trade facility is secured by (i) a first priority lien on the goods and related accounts receivable financed by the company under the King Trade facility, and (ii) a second priority lien on substantially all other assets of the company. The amounts payable under the King Trade facility bear interest at varying rates which depend primarily on the length of time such amounts are outstanding, the amount advanced for each transaction and the aggregate of all amounts advanced.
The master agreement contains representations and warranties and covenants that are customary for such financing arrangements.
Tandy Brands is a designer and marketer of branded men’s, women’s and children’s accessories, including belts, gifts, small leather goods and bags.
To read the entire Tandy Brands news release, click here.