SunTrust Robinson Humphrey acted as lead arranger on a new $22 million senior secured credit facility for Primo Water, a provider of multi-gallon purified bottled water, self-service refill water and water dispensers. The company also refinanced its existing credit facilities.
BMO Harris Bank, U.S. Bank and JPM Securities acted as joint lead arrangers on the transaction.
The proceeds from the new facility along with the proceeds from the recently completed follow-on equity offering will be used to repay the existing $186 million senior credit facility and the 9-1/16% junior subordinated deferrable interest debentures.
The new facility also provides a $190 million term loan and a $30 million revolving credit facility that matures in June of 2023. It has an interest rate beginning at LIBOR + 2.50%, which is adjusted downward based upon the consolidated leverage ratio.
As a result of the refinancing, Primo expects interest expense of approximately $5 million under the new facility for the six months ending on December 31, 2018. This represents a savings of approximately $5.5 million in interest expense in H2/2018, when compared to the prior facilities. Primo intends to use the interest savings for working capital purposes, including marketing initiatives designed to accelerate growth.
