Bank of America acted as sole lead arranger on an amendment to a senior secured asset-based revolving credit facility while Pathlight Capital acted as sole lead arranger for a new $70 million term loan for Armstrong Flooring.
Armstrong Flooring modified its facility size to $90 million with a maturity date in December 2023 and an interest rate on borrowings based on LIBOR with a floor of 1% plus a spread of 2.75% to 4%. The amendment provides the company with enhanced flexibility by adjusting the covenants to terms more appropriate in the current circumstances, among other changes, subject to the terms and conditions of the ABL facility amendment.
Additionally, the company entered into a new $70 million term loan facility to further strengthen its capital resources. Borrowings under the new term loan will bear interest at a rate of LIBOR with a floor of 1.5% plus a spread of 12%. The term loan matures in June 2025 and will be available for business transformation and growth initiatives, working capital needs and general corporate purposes.
Following the transactions, Armstrong Flooring had total liquidity of approximately $97 million, including cash plus availability under its credit facilities.
“The amended facility and expansion of our capital resources equips Armstrong Flooring with additional liquidity to navigate the current environment,” Michel Vermette, president and CEO of Armstrong Flooring, said. “During the month of May 2020, we were encouraged to see our preliminary net sales increase sequentially compared to April. With our strengthened balance sheet and enhanced flexibility, we are now better positioned to execute our business transformation and invest strategically in market opportunities as the economic recovery gains momentum. We appreciate our lending partners’ support for Armstrong Flooring and their confidence in our strategic roadmap.”
Jefferies acted as a financial advisor and Skadden, Arps, Slate, Meagher & Flom acted as legal advisor to Armstrong Flooring.
Armstrong Flooring designs and manufactures flooring solutions.