Funko enters commitment letter for $285 million refinancing facilities

By Wendy Van Sickle

Columbus, Ohio, Sept. 12 – Funko, Inc. entered into a commitment letter with PNC Bank, NA and PNC Capital Markets LLC on Sept. 7 for $285 million to refinance its existing senior credit facilities, according to an 8-K filing with the Securities and Exchange Commission.

Additionally, JPMorgan Chase Bank, NA will serve as joint lead arranger and syndication agent for the new credit facilities.

The new credit facilities will have a term of five years and will consist of a $50 million revolving credit facility with a $5 million sublimit for letters of credit and a $235 million term loan facility.

At June 30, the company had $248.5 million outstanding under its existing senior secured credit facilities, consisting of $206.1 million outstanding under the term loan A and $42.3 million of revolver debt.

The commitment letter provides for borrowings that are expected to initially bear interest at Libor plus 325 basis points, subject to adjustment based on leverage ratio.

Funko’s existing term loan A accrues interest at Libor plus 650 bps, and its existing revolver accrues interest at one-month Libor plus 175 bps.

“If we are able to close the new senior secured credit facilities on the proposed terms, we believe the refinancing of our existing senior secured credit facilities will reduce our cash interest expense and extend our maturity profile,” Funko said in the filing.

Under the terms of the commitment letter, the company must maintain a maximum leverage ratio of 3 times, subject to some step-downs, and a minimum fixed-charge coverage ratio of 1.25 times.

In addition to refinancing the existing credit facilities, proceeds of the new credit facilities would be available for working capital needs, including capital expenditures and acquisitions, and for general corporate purposes.

Funko is a Lynnwood, Wash.-based company that manufactures licensed pop culture toys.

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