1847 Goedeker inks $140 million five-year credit agreement

By Rebecca Melvin

Concord, N.H., May 11 – 1847 Goedeker Inc. and its subsidiary, Appliances Connection Inc., entered into a secured credit agreement on May 9 for a $100 million term loan and a $40 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The revolver includes a $2 million swingline sub-facility.

The company borrowed the entire amount at closing.

Proceeds of the term loan were used to prepay obligations in full under the borrowers’ existing first-lien term loan credit agreement with Manufacturers and Traders Trust Co. as agent, and upon payment the prior credit agreement was terminated.

Each of the new loans matures May 9, 2027. They will bear interest at term SOFR plus 150 basis points to 195 bps depending on the consolidated leverage ratio. There is also a commitment fee of 25 bps, regardless of the consolidated leverage ratio. In an event of default, the loans will bear interest at a rate that is 200 bps above the interest rate then in effect for the applicable loan.

Commencing on Sept. 30, 2022 through and including June 30, 2023, the borrowers must repay the principal amount of the term loan in quarterly installments of $1.25 million each, payable on the last business day of each March, June, September and December. Commencing on Sept. 30, 2023 through and including June 30, 2024, the borrowers must repay the principal amount of the term loan in quarterly installments of $1,875,000 each, payable on the last business day of each March, June, September and December. Commencing on Sept. 30, 2024 through the maturity date, the borrowers must repay the principal amount of the term loan in quarterly installments of $2.5 million each, payable on the last business day of each March, June, September and December.

The remaining unpaid principal amount of the term loan must be repaid on the maturity date, unless payment is sooner required by the credit agreement.

The credit agreement contains customary events of default and customary representations, warranties and affirmative and negative financial and other covenants for loans of this type.

Bank of America NA is administrative agent of the facility, and Manufacturers and Traders Trust and Webster Bank NA are co-syndication agents.

Based in Brooklyn, N.Y., the company sells appliances, furniture and home goods in the U.S. household appliances market.

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