JAKKS Pacific reached an agreement with holders of its term loan and Wells Fargo, holder of its revolving credit facility, to receive a waiver on its EBITDA covenant until March 31, 2022. The term loan had a covenant requiring trailing 12-month EBITDA to be at least $34 million, which is now reduced to $25 million.

Under the agreement, JAKKS Pacific will pre-pay $15 million of the term loan immediately and, under certain conditions, pre-pay up to an additional $5 million no later than Q3/21. As of Sept. 30, the company had $138.8 million outstanding on its term loan.

“The agreement we have reached with our lenders allows us to reduce our indebtedness and related interest expense without additional dilution to our shareholders, while also providing greater financial flexibility as we continue to work on improving our operations and positioning the company for future growth. We appreciate the continued demonstration of support,” Stephen Berman, co-founder and CEO of JAKKS, said.

JAKKS Pacific is a designer, manufacturer and marketer of toys and consumer products headquartered in Santa Monica, CA.