CSS Industries, a consumer products company serving the craft, gift and seasonal markets, entered into a new $125 million asset-based senior secured credit facility with JPMorgan Chase Bank acting as administrative agent. Bank of America and KeyBank also participated in the facility.
The ABL facility also included a $25 million borrowing availability expansion feature.
Proceeds from the facility will be used to refinance the company’s existing indebtedness, as well as fund working capital needs and other general corporate purposes. The new credit facility will expire in March 2024. It replaces the company’s prior credit facility, which was scheduled to expire in March 2020.
“This new asset-based facility will serve the needs of our business during our fluctuating working capital cycle, and is expected to provide us with more than sufficient liquidity to meet our ongoing needs,” said Keith W. Pfeil, CSS executive vice president and chief financial officer. “In the near term, we will continue to aggressively pay down our outstanding debt, while we seek to right size our existing business structure. We would like to thank our new banking partners for working diligently to complete this new credit facility, and we look forward to growing and developing our banking relationships with them.”
Borrowings under the ABL facility will generally bear interest at a London interbank offered rate (Adjusted LIBO Rate), plus a margin ranging from 2.00% to 2.50%. The applicable rates will be determined at the end of each company fiscal quarter based upon the company’s then applicable fixed charge coverage ratio; however, during the first year of the ABL facility, the applicable interest rate will be Adjusted LIBO Rate plus 2.50%.
The ABL facility also requires the company to pay a commitment fee of 0.25% per annum on the average daily unused portion of the revolving commitment.
At inception, the ABL facility maintained an outstanding principal balance of approximately $36.5 million.
