Sequential Brands enters six-year $368 million term loan facility

By Wendy Van Sickle

Columbus, Ohio, Dec. 4 –Sequential Brands Group, Inc. entered into an amended and restated credit agreement providing for a six-year $368 million senior secured term loan facility on Friday, according to an 8-K filed with the Securities and Exchange Commission.

The total consists of $215.5 million of loans that were outstanding under the company’s existing credit agreement and $152.5 million of new term loans.

Borrowings bear interest at Libor plus a margin ranging from 800 basis points to 875 bps, depending on consolidated total leverage ratio.

Wilmington Trust, NA is the administrative agent of the agreement.

The company may make, in whole or in part, voluntarily prepayments of the loans outstanding under the facility, subject to the payment of customary breakage costs with respect to Libor-based borrowings.

The agreement contains financial covenants including a maximum consolidated total leverage ratio initially set at 7.25 times, which decreases over the term agreement until the final maximum ratio of 6.75 times is reached for the fiscal quarter ending Sept. 30, 2019.

Also, the company may not exceed a maximum consolidated first-lien leverage ratio initially set at 2.47 times, which decreases periodically to the final maximum ratio of 2.30 times for the quarter ending Sept. 30, 2019.

The company has the option to request one or more additional term loan facilities or to increase the term loan commitments so long as the increase would not cause consolidated total leverage ratio to exceed 6 times.

Proceeds were used to fund the company’s acquisition of Martha Stewart Living Omnimedia Inc.

Sequential Brands is a New York-based owner, promoter, marketer and licenser of a portfolio of consumer brands in the fashion, active, and lifestyle categories. Martha Stewart Living Omnimedia is a diversified media and merchandising company.

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