Daseke, a flatbed, specialized transportation and logistics solutions company in North America, refinanced its existing $484 million term loan B due February 2024 with a new $400 million term loan B and available cash. JPMorgan Chase Bank served as exclusive arranger and sole bookrunner for Daseke in executing this transaction.
The new term loan B, maturing in March 2028, has a floating interest rate of LIBOR plus 400 basis points, which is reduced from LIBOR plus 500 basis points. The LIBOR floor also was reduced from 100 basis points to 75 basis points.
In addition, Daseke will seek an amendment to its ABL credit agreement to increase maximum commitments thereunder from $100 million to $150 million, with a $50 million uncommitted accordion.
Daseke will utilize $84 million of its $176 million cash and cash equivalents balance as of Dec. 31, 2020, to pay down debt, which was driven by excess cash generated from operations over the course of the previous year. Upon close, the company’s estimated net debt leverage ratio as defined by its credit agreement will be approximately 2.7x based on the terms of the credit agreement
“We are pleased with the improved terms of the new term loan B, which were supported by the company’s improved economic performance and unique competitive positioning,” Jason Bates, CFO of Daseke, said. “Execution against our strategic plan over the last six quarters has significantly enhanced our operational and financial performance and helped us fortify our balance sheet and meaningfully improve credit metrics. Given the attractive market backdrop, we believe now was the opportune time to utilize our strong cash position to reduce the company’s funded leverage.
“Additionally, Daseke’s strengthening credit profile has been recognized by ratings agencies, and the completion of this refinancing further extends our financial flexibility, particularly given the improved pricing and covenant-lite structure. The better cost of debt capital and greater financial flexibility under the new term loan will help serve strategic needs and the pursuit of accretive growth opportunities. We remain committed to further advancing our business transformation and driving sustainable top-line and profitability growth.”
In connection with the refinancing, Moody’s Investment Services upgraded Daseke’s corporate family and senior secured ratings to “B2” from “B3,” and S&P Global provided a one-notch upgrade to Daseke’s issuer credit family and term loan ratings to “B.”
