Horizon Global looks to repay senior loan with second-lien facility

By Caroline Salls

Pittsburgh, March 13 – Horizon Global Corp. received a revised binding commitment from a proposed third-party lender to provide a $51 million second-lien term facility to repay all amounts outstanding under its senior term loan agreement and for working capital purposes, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

Horizon said the borrowings under its senior term loan agreement with Cortland Capital Markets Services LLC were scheduled to mature on March 7. However, the company said it entered into an amendment on that date to extend the maturity of the term loan to March 14.

In addition, the company said previously that it did not expect to be in compliance with the net leverage ratio covenant in its term loan credit agreement as of Dec. 31.

As a result, Horizon said it has been in discussions with its lenders regarding amendments to the term loan agreement, as well as discussions with its existing lenders and prospective lenders regarding additional financing to satisfy the requirement under the senior term loan agreement and to better position the company to address the working capital needs for its 2019 summer selling season and provide additional operating flexibility.

The company said in the 8-K that the proposed second-lien term lender holds a significant amount of Horizon’s convertible notes and recently purchased a significant amount of the debt outstanding under the term loan agreement.

Closing on the second-lien term facility or any additional financing would be subject to the satisfaction or waiver of a number of conditions, including the agreement of the required lenders under the term loan agreement and the company’s revolving credit facility to provide amendments to permit the incurrence of the debt and to modify covenants.

Horizon is a Troy, Mich.-based manufacturer of branded towing and trailering equipment.

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