School Specialty (SSI), a distributor of supplies, furniture and both curriculum and supplemental learning resources to the education, healthcare and other marketplaces, completed a new $140 million term loan with TCW’s Direct Lending Group.

In conjunction with the financing, SSI repaid its previous term loan, which had a remaining principal balance of $117.4 million and a maturity date of June 11, 2019.

The new term loan will be a five-year, $140 million facility with $110 million drawn upon closing. The term loan will bear interest initially at a rate of LIBOR plus 625 basis points. There is an additional $30 million available to support the strategic initiatives of the company, subject to certain terms and conditions.

Additionally, in conjunction with the new term loan, the company entered into an amendment to its current $125 million revolving asset-based credit facility (ABL) provided by Bank of America and Bank of Montreal.

The amendment includes a new lower pricing tier of LIBOR plus 125 basis points, a seasonal increase in eligible accounts receivable for the months of March through August, and the inclusion of additional inventory in the company’s borrowing base. These provisions will provide additional availability throughout the year. The ABL amendment extends the term of the ABL to February 7, 2022.

The new covenants provide more flexibility than the existing term loan structure and overall, the company anticipates interest savings of approximately $3 million over the next 12 months.