Builders FirstSource Increases Liquidity to Support Sales GrowthDecember 20th, 2012 by DWM Magazine
Builders FirstSource Inc. announced this week that it has amended its first-lien term loan agreement with affiliates of Highbridge Principal Strategies LLC. The company amended the Term Loan to enhance its liquidity position to support both current and anticipated increases in sales volume.
“Our year-over-year sales growth exceeded 30 percent in each of the past four quarters, and we currently see no signs of our sales pace slowing,” says Floyd Sherman, CEO. “This strong growth prompted us to proactively seek additional liquidity to support our higher working capital requirements. We believe the $93 million of incremental liquidity to be provided by this transaction will enable us to continue growing market share and take further advantage of improving demand for housing.”
Material terms of the amendment include:
– Increasing the principal amount by $65 million;
– The additional principal was issued at 95.5%, resulting in approximately $60 million of net cash received after fees and expenses, with no modifications to interest rate and maturity;
– Reducing the minimum cash requirement from $35 million to $15 million;
– Adding a separate $15 million letter of credit (“LC”) commitment by SunTrust Bank, which is expected to reduce the company’s current cash collateral requirement for LC’s by approximately $13 million upon satisfaction of certain post-closing conditions; and
– Increasing the minimum specified collateral value to $225 million, contingent upon maintaining certain levels of qualified cash.