TD Arranges Expanded Term Facility for Compass Diversified
Compass Diversified Holdings (CODI) announced it exercised an option under the company’s credit agreement to borrow an incremental term loan in the amount of $30 million.
The incremental term loan, arranged by TD Securities and issued at par value, increases the Company’s aggregate outstanding borrowings under its term loan facility to approximately $281.9 million.
Concurrent with the incremental term loan borrowing, CODI amended the pricing terms of its term loan facility. Under the terms of the amendment, amounts borrowed now bear interest at either LIBOR plus a margin of 4%, as compared to the previous LIBOR margin of 5% or base rate plus a margin of 3% as compared to the previous base rate margin of 4%. In addition, the LIBOR floor was reduced from 1.25% to 1%.
CODI said it utilized $27.0 million of the net proceeds from the incremental term loan to reduce borrowings outstanding under its $290 million revolving credit facility. As a result, there are no current borrowings outstanding under the revolving credit facility at closing.
CODI also announced it has amended the pricing terms of its revolving credit facility, which is subject to borrowing base restrictions. Under the terms of the amendment, amounts borrowed now bear interest based on a leverage ratio defined in the credit agreement at either LIBOR plus a margin ranging from 2.50% to 3.50%, as compared to the previous margin that ranged from 3.00% to 4.00%, or base rate plus a margin ranging from 1.50% to 2.50% as compared to the previous margin that ranged from 2.00% to 3.00%. In addition, the unused fee for the revolving credit facility was reduced from 1.00% to 0.75% when leverage is lower than a defined ratio and the maturity date for the revolving credit facility was extended by six months to April 2017. All other terms of the credit agreement remain unchanged.
Alan Offenberg, CODI’s chief executive officer, commented, “We are pleased to be able to take advantage of the favorable credit market conditions and amend our term loan facility for the second time over the past year.”
Westport, CT-based Compass Diversified Holdings owns and manages a diverse family of established North American middle market businesses. Each of its eight current subsidiaries is a leader in their niche market.