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Conn's to upsize, extend asset-based facility, get $100 million term
By Sara Rosenberg
New York, Oct. 22 - Conn's Inc. plans on upsizing and extending its asset-based facility and will get a new $100 million senior secured second-lien term loan due in 2014, company officials said in a conference call on Friday.
The asset-based facility will be sized at $375 million, up from $210 million currently, and will mature in 2013 instead of in 2011.
Officials said that commitments towards the revised asset-based facility have been received from existing and new lenders.
Pricing on the asset-based loan is expected to range from Libor plus 375 basis points to 400 bps based on leverage.
As for the second-lien term loan, officials said in the call that select third-party lenders have committed to that loan.
The term loan is expected to be priced at Libor plus 1,360 bps, including the amortization of closing fees, with a 3% Libor floor.
Both the asset-based facility and the second-lien term loan will be subject to a borrowing base.
Financial covenants include fixed-charge coverage and leverage ratios.
Proceeds will be used to refinance $320 million of asset-backed securitization facilities.
Other funds for the refinancing will come from a planned rights offering that is anticipated to raise about $25 million of equity capital.
The company said that its weighted average interest rate is going up by roughly 200 bps as a result of these transactions.
The refinancing is being done to provide the flexibility needed to manage operations, officials added in the call.
Conn's is a Beaumont, Texas-based specialty retailer of consumer electronics, home appliances, furniture, mattresses, computers, and lawn and garden products.
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