Lincoln Educational Services executed a new credit agreement with its current lender, Sterling National Bank, comprised of four separate facilities providing in the aggregate $60 million.
The facilities are comprised of a $20 million term loan funded at closing to refinance the existing facility; a $10 million delayed draw term loan; a $15 million committed revolving line of credit, with a sublimit of up to $10 million for standby letters of credit; and a $15 million cash collateralized line of credit.
All of the facilities are senior secured with the term loans maturing in five years, the revolving line of credit maturing in three years, and the cash collateralized line of credit maturing on January 31, 2021.
The new credit facility will increase the company’s available liquidity by approximately $25 million supporting working capital and growth initiatives. The company further anticipates to realize annualized interest savings of approximately $1 million as a result of a reduction in the interest rate by an anticipated 30%. The company’s prior credit facility as of the closing had an outstanding balance of $21.8 million.
The additional liquidity provided by these transactions will strengthen the company’s balance sheet and provide flexibility to execute long-term growth initiatives such as expansion of existing high demand programs, the addition of new programs with strong employer demand and the expansion of the existing call center which reaches prospective students throughout the country. The company also plans to explore strategic acquisitions consistent with the company’s core business, upgrade training equipment to enhance the student experience, and increase marketing investments that will cost-effectively expand our reach to potential new students in key markets while raising overall brand awareness.
“The increased liquidity positions us to capitalize on new growth opportunities at an exciting time, as we achieved eight consecutive quarters of year-over-year start growth as of September 30, 2019, in the tightest labor market we have experienced in decades,” said Scott Shaw, President and CEO.
Lincoln Educational Services is a provider of diversified career-oriented post-secondary education and helping to provide solutions to America’s skills gap.
