Salton gets commitments for $425 million in senior secured credit facilities

By Sara Rosenberg

New York, March 29 - Salton Inc. has received commitments for $425 million in senior secured credit facilities to help fund its merger with Applica Inc., according to a DEFA14A filed with the Securities and Exchange Commission Thursday.

Under the financing letters, Bank of America has committed to provide a $250 million 60-month senior secured revolving credit facility with a $75 million accordion feature and pricing that can range from Libor plus 125 to 200 basis points depending on availability.

In addition, Silver Point Finance LLC has committed to provide a $175 million five-year senior secured credit facility that will include a U.S. term loan, a U.K. term loan and a U.K. revolver, with tranche sizes still to be determined. Financial covenants consist of a minimum EBITDA, a minimum fixed-charge coverage ratio and a maximum leverage ratio.

Furthermore, Harbinger Capital Partners Special Fund, LP has agreed to purchase shares of a new class of Salton's preferred stock and detachable warrants to purchase 21 million shares of Salton's common stock for an aggregate purchase price of $100 million by exchanging a principal amount of Salton's 12¼% senior subordinated notes due 2008 and/or second-lien notes in an aggregate amount equal to the $100 million.

Closing of the merger is subject to approval by the company's stockholders, the funding of the financing commitments or alternative financing, and the absence of legal impediments to the consummation of the merger.

Salton is a Lake Forest, Ill., designer, marketer and distributor of branded, high-quality small appliances, home decor and personal care products. Applica is a Miramar, Fla., marketer and distributor of branded and private-label small household appliances.

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