Daily News: December 5, 2014

WFCF, KKR Amend Sportsman’s Warehouse Credit Agreement

Sportsman’s Warehouse announced that it refinanced its existing $235 million senior secured term loans at a lower interest rate and has increased the borrowing capacity under the terms of its revolving credit facility.

Sportsman’s Warehouse partnered with KKR’s credit business on the new senior secured term loan. The new $160 million senior term loan facility, issued at a price of 99% of the aggregate principal amount and due December 2020, includes an interest rate of LIBOR plus 600 basis points, with a LIBOR minimum of 125 basis points, an interest rate reduction of greater than one percent over the blended rate on the two tranches of the prior term loans.

In addition to the refinance of the term loan, the company also increased the borrowing capacity on its existing revolving credit facility with Wells Fargo Capital Finance to $135 million from $105 million. The new agreement also contains a $15 million accordion feature that may be exercised any time after June 2017. This facility now matures in December 2019 and contains the same general terms as the previous agreement.

The terms of the new loan reduce scheduled amortization payments to approximately $1.6 million per year, a reduction of approximately $0.8 million from the prior term loans. In addition, the company estimates that it will save approximately $2 million annually in interest expense, or approximately $0.03 per share, after tax, under the terms of the new loan. In connection with the refinancing, the Company expects to record a pre-tax charge of approximately $5.7 million for the write-off of deferred financing fees and other fees, of which $5.4 million is non-cash, in the fourth quarter of fiscal year 2014. The new term loan has substantially the same financial negative and affirmative covenants and events of default as the existing facility.

“We are excited to have completed this refinancing with these two great partners,” noted Kevan P. Talbot, CFO. “Not only have we lowered our interest rate on our term loan facility for a significant interest savings, but we have also established a credit facility that will allow us more flexibility to execute our growth plans.”

Sportsman’s Warehouse is an outdoor sporting goods retailer.