SeaWorld Entertainment closed on a refinancing amendment to its existing senior secured credit agreement.
According to a related 8-K filing, JPMorgan Chase Bank acted as successor administrative agent, successor collateral agent, L/C issuer and swing line lender on the amendment.
The amended credit agreement, among other things:
- Extended the maturity of the existing $544 million term B-2 loans from May 14, 2020 to March 31, 2024 by refinancing the entire amount of the existing term B-2 loans with new term B-5 loans
- Extended the maturity of the $210 million revolving credit facility from March 31, 2022 to October 31, 2023
- Removed all the financial covenants applicable to the term B-5 loans (the only remaining financial covenant in the company’s credit agreement is a springing maximum first lien secured leverage ratio of 6.25x that only applies to the revolver when it is drawn in an amount above 35% of commitments, excluding $30 million of letters of credit)
- Redefined “adjusted EBITDA” to be more consistent with management’s view of the underlying performance of the business including, among other items, the removal of limitations on certain add-back adjustments
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As a result of the transaction, the interest rate on the $210 million revolver (LIBOR + 2.75%) and on the $983 million of existing term B-5 loans (LIBOR + 3.00%) did not change. The interest rate on the $544 million of term B-2 loans that were refinanced into new term B-5 loans changed from LIBOR + 2.25% to LIBOR +3.00% to match the interest rate on the existing $983 million of existing term B-5 loans.
“We are pleased with the successful outcome of this financing transaction which closed on October 31, 2018,” said Marc Swanson, chief financial officer of SeaWorld Entertainment. “The transaction extended our maturities on the term loan and revolving credit facility, eliminated almost all financial covenants and revised the definition of adjusted EBITDA as defined in our credit agreement. We are pleased that this transaction was oversubscribed, which demonstrates the confidence investors have in our business model. These changes put the company’s credit agreement more in-line with current market standards and provide the company with enhanced financial flexibility going forward.”
