Shipping company Celadon Group amended its revolving line of credit, increasing the maximum borrowing capacity from $180 million to $195 million and the letters of credit from $30 million to $35 million.
Bank of America, Wells Fargo and Citizens Bank were lenders on the transaction.
As of June 30, 2018, the outstanding borrowing under the line of credit was approximately $161 million and the outstanding letters of credit were approximately $23 million. The company expects the liquidity provided by the amendment will be sufficient through the amendment period assuming the usual transactions with customers, vendors, lenders, lessors and other counterparties continue during said period.
Celadon’s equipment notes and leases have remaining obligations in excess of $350 million. A substantial portion of them reached their original maturities over the past year and were extended during refinancing.
The company and its lenders also agreed on a term sheet to increase liquidity and extend its covenant package. The particulars on that transaction include:
- A maximum outstanding amount increase to $230 million until December 2018, then a decrease to $170 million
- Pricing at a base rate plus 8.00%
- A monthly commitment fee commencing in October at the rate of 0.45% of the aggregate commitments, which are currently $250 million
- The company’s Canadian and Mexican assets and cash dominion as collateral
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Celadon CEO Paul Svindland said, “We are grateful for the confidence displayed by our existing revolving lenders who immediately stepped up with a proposed increase in liquidity and extended covenant relief to support a refreshed capital raising process. The vast majority of our equipment lenders and lessors have been equally supportive during our past efforts while we have remained current in our regular monthly payments.”
