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Farmer Bros. amends, extends revolver, increases to $125 million
By Wendy Van Sickle
Columbus, Ohio, Aug. 30 – Farmer Bros. Co. amended its credit agreement entered in March 2015 to increase the revolving commitment by $50 million to $125 million, among other things, according to an 8-K filing with the Securities and Exchange Commission.
Administrative agent JPMorgan Chase Bank, NA agreed to provide $75 million of the commitments, and syndication agent SunTrust Bank agreed to provide the other $50 million.
J.P. Morgan Securities LLC is the bookrunner and lead arranger.
The amendment, which closed on Aug. 25, also includes an accordion feature permitting commitments to be increased by up to $50 million.
The maturity date was extended to Aug. 25, 2022 from March 2, 2020.
Additionally, the amendment increases the advance rate on the borrowers’ eligible accounts receivable that are with investment-grade customers to 90% from 85% and increases the amount of the borrowers’ eligible real property which can be included in the borrowing base to the lesser of $60 million and 75% of the fair market value of eligible real property from the lesser of $25 million and 75% of the fair market value of the eligible real property.
The amended credit agreement also provides for an increase to the margin of 37.5 basis points on any drawn loans under the revolver up to an amount equal to the value of eligible real property in the borrowing base.
Otherwise, interest rates are unchanged at Libor plus 125 bps to 200 bps, based on availability.
The commitment fee was cut to a flat 25 bps from a range of 25 bps to 37.5 bps, based on usage.
Proceeds will be used to refinance existing debt and to finance the company’s working capital needs.
Farmer Bros. is a Torrance, Calif.-based direct distributor of coffee, tea and culinary products.
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