Builders FirstSource Inc., based in Dallas, announced the completion of a new $160 million first-lien Term Loan financing agreement (Term Loan) with affiliates of Highbridge Principal Strategies LLC. The company also announced it had entered into a stand-alone letter of credit facility (LC Facility) with SunTrust Bank, which provides for the issuance of up to $20 million of letters of credit. With the proceeds, the company intends to repay the $20 million outstanding under the current revolving credit facility, use $14.2 million to collateralize letters of credit outstanding under the new LC Facility, and pay fees and expenses related to the transaction, according to a company press release.

“This financing transaction strengthens our liquidity and positions us to take full advantage of the expected recovery in housing,” says Floyd Sherman, Builders FirstSource CEO. “This financing transaction would not have been possible without the continued improvement in our 2011 financial results.”

Sherman states that upon receipt of the $119.6 million in net proceeds related to this transaction, the company’s cash balance was approximately $150 million, and net liquidity was approximately $115 million after giving effect to a $35 million minimum cash requirement contained in the term loan.

“Our sales results through November have exceeded our expectations, delaying the anticipated seasonal reduction in working capital typically seen by this point in the year. Our liquidity has also enabled us to take advantage of opportunistic inventory buys to protect customer pricing as we head into 2012,” adds Sherman.

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