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Zagg accordion raises revolver by $19.8 million, lifts rates by 50 bps
By Rebecca Melvin
New York, April 17 – Zagg Inc. has increased the maximum borrowing amount of its revolving credit facility by $19.8 million to $144.8 million under a fourth amendment agreement dated April 15, according to an 8-K filing with the Securities and Exchange Commission.
The temporary accordion’s maturity date is March 31, 2021.
KeyBank NA is the facility’s administrative agent and lender along with Zions Bancorp. NA dba Zions First National Bank and MUFG Union Bank NA as lenders.
Interest rates have been raised under the amendment by an additional 50 basis points, or to Libor plus 100 bps on the revolver. But the amendment also includes a replacement benchmark rate to allow the company to enter into an agreement with the U.S. Small Business Administration to obtain a loan under the Coronavirus Aid, Relief, and Economic Security Act.
In addition, the amendment adds asset coverage ratio as an additional debt covenant requirement, which is effective as of June 30.
The company entered into the amendment to increase its liquidity capacity under the economic conditions caused by the Covid-19 pandemic.
The company also entered into a loan agreement on April 13 with the SBA under the Paycheck Protection Program for a loan amount of $9,443,728.
The company engaged KeyBank as the lender for the PPP loan.
The interest rate for the PPP loan is 1% per annum, and the company must pay $397,601 every month beginning seven months from the loan date, with the loan having a maturity date of two years.
The company may also potentially obtain loan forgiveness for the PPP loan if it meets certain requirements for eligible employees. It entered into the PPP loan to help sustain its employee payroll costs, rent and utilities due to the impact of the Covid-19 pandemic, the filing stated.
Based in Salt Lake City, Zagg develops accessories for iPods and cell phones.
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