Callaway amends facility for $360 million of ABL revolver, term loans

By Wendy Van Sickle

Columbus, Ohio, Nov. 22 – Callaway Golf Co. amended and restated its loan and security agreement on Monday with Bank of America, NA as lead arranger, bookrunner and administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amended agreement provides for a senior secured asset-based revolving credit facility of up to $330 million, comprising a $260 million U.S. facility, of which $20 million is available for letters of credit; a $25 million Canadian facility, of which $5 million is available for letters of credit; and a $45 million U.K. facility, of which $2 million is available for letters of credit, in each case subject to borrowing base availability under the applicable facility.

There is also a senior secured term loan facility in an amount equal to the lesser of (a) $30 million and (b) 18% of the net orderly liquidation value of the company’s, its subsidiary borrowers’ and its guarantors’ trademark portfolio.

The term loan may be drawn in a single borrowing until six months after closing. It begins amortizing 15 months after it is borrowed by 1/12th of the original principal amount, with payments made every three months.

The revolver and term loan are priced at Libor or CDOR plus an applicable margin ranging from 150 basis points to 200 bps, depending on the company’s availability ratio.

In addition, the ABL facility provides for a monthly fee of 25 bps on the unused portion of the facility, and the term loan provides for a monthly fee of 50 bps on the unused portion until the facility is drawn or terminated.

The revolver is due Nov. 19, 2022.

The term loan matures four years from the date it is drawn.

There revolver has a $150 million accordion feature.

MUFG is the syndication agent. SunTrust Bank is the documentation agent.

The company will be subject to compliance with a fixed-charge coverage ratio covenant and with a leverage ratio at any time borrowings are outstanding under the term loan.

The loans may be used to refinance existing debt, for working capital and for general corporate purposes.

Callaway is a Carlsbad, Calif.-based manufacturer and seller of golf clubs, golf balls and golf accessories.

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