FBI Gets $250 Million Credit Facility

September 27, 2012  by in UnCategorized   

By Home Furnishings Business in Financial Reports on September 28, 2012

Furniture Brands International (NYSE: FBN) has closed on a five-year, $250 million credit facility.

The amount comprises a new $200 million asset-based loan and a $50 million secured term loan. These facilities repay the amounts outstanding under the existing asset-based loan, and after associated closing costs, result in more than $90 million of excess borrowing availability.

The incremental availability provided by this financing, along with the FBI's cash balance, is expected to provide sufficient capital to fund business improvements and growth initiatives and for general corporate purposes, as needed. The company will incur increased interest expense associated with the new facility as well as approximately $8 million in closing costs, which will be expensed over the five year loan period.

"We are very pleased to have opportunistically accessed the capital markets with a financing package that provides for increased borrowing capacity and greater financial flexibility," said Ralph Scozzafava, Chairman and CEO of Furniture Brands, St. Louis. "We are appreciative of the support from our new and existing lenders and are pleased to have partnered with such a distinguished group of financial institutions. These facilities will allow our company to continue our future growth and execute on initiatives that will improve our competitiveness and financial performance."

GE Capital, Bank of America, and Wells Fargo provided the majority of the facility on a fully committed basis and will serve as joint lead arrangers for the $200 million facility. Additionally, this asset-based loan contains an accordion provision that, subject to certain conditions, allows Furniture Brands to expand the asset-based loan by up to $50 million. Pathlight Capital LLC, a Sycamore Partners company, will serve as the administrative and collateral agent of the new $50 million secured term loan and the Junior Capital Division of Wells Fargo Capital Finance, which is a division of Wells Fargo, will act as the documentation agent.