Logan Ridge Finance refinanced its entire legacy capital structure, an important milestone and key strategic initiative for the company.
Specifically, on May 10, the company amended its existing senior secured revolving credit facility agreement with KeyBank, by increasing the initial commitment from $25 million to $75 million, with an uncommitted accordion feature that allows the company to borrow up to an additional $125 million. The amended KeyBank credit facility has a May 10, 2027 maturity date.
Borrowings under the amended KeyBank credit facility will bear interest at 1 million Term SOFR plus 2.90% during the three-year revolving period and 3.25% thereafter, with 0.4% 1 million Term SOFR floor. The net proceeds to the company from the initial draw was $49.1 million on May 10, 2022.
Furthermore, the company entered into a note purchase agreement for the issuance of $15 million convertible notes due in April 2032. The proceeds from the initial draw on the KeyBank credit facility, coupled with the net proceeds from the 2032 convertible notes issued in April and current cash on hand, provides the company ample liquidity to pay off its outstanding $52.1 million of 5.75% convertible notes as well as the remaining $22.8 million of 6% notes, both of which mature on May 31.
“We are pleased to announce that we have successfully refinanced our entire legacy capital structure at lower interest rates, which materially lowers our cost of debt capital from approximately 7% as of March 31, 2022 to approximately 5.2% today,” Ted Goldthorpe, CEO and president of Logan Ridge Finance, said. “KeyBank has been an excellent partner for Logan Ridge and we are happy to leverage this strong relationship to improve Logan Ridge’s financial position and capital structure. This represents a significant milestone for Logan Ridge as we continue to execute on our strategic vision we laid out for shareholders when we became the external manager in July 2021.”