Digital Media ups term loan commitments by $22 million, adds PIK option

By Mary-Katherine Stinson

Lexington, Ky., April 19 – Digital Media Solutions LLC and Digital Media Solutions Holdings LLC reported an April 17 amendment and waiver to their existing credit facility with a syndicate of lenders, according to an 8-K filing with the Securities and Exchange Commission.

Truist Bank and Fifth Third Bank are joint lead arrangers. Truist Bank is the administrative agent and collateral agent.

The second amendment adds new tranche A term loan commitments in the amount of $22 million with a maturity date of Feb. 25, 2026, increasing the total borrowing capacity under the facility to $297 million from $275 million.

The amendment allows for payment in kind on the quarterly interest payments due on March 31 and for the each of the following quarters up to March 31, 2025.

Compliance with the net leverage ratio covenant is waived through June 30, 2025.

In connection with the amendment, Digital Media is required to pay an 8% commitment fee, which will be fully earned on the initial funding disbursement date and payable as PIK interest on the effective date.

The covenants have been amended to include some limited waivers related to prior defaults and events of default under the facility, amends some negative and affirmative covenants and adds additional covenants.

There is a minimum liquidity covenant of $5 million after the second amendment effective date.

The company has agreed to a variance test in which (i) Digital Media’s disbursements during a testing period cannot not be more than 15% in excess of the amount reflected in the corresponding period in the facility’s loan parties’ projected cash flows or (ii) the company’s aggregate net cash receipts during the two-week period after the amendment effective date will not be less than 80% for the trailing two-week period, not less than 82.5% for the trailing three-week period and not less than 85%for the trailing four-week period of the aggregate cash receipts forecasted in the cash flow forecast applicable during the testing period.

The company has also agreed to promptly commence a strategic review and marketing process for a sale of all or substantially all its assets, subject to certain milestones.

Digital Media is a Clearwater, Fla.-based adtech company.

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