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BofA Reaches Agreement with Celadon for New $225MM Credit Facility

May 02, 2017, 07:18 AM
Filed Under: Trucking

Trucking firm Celadon has reached an agreement in principle with Bank of America, the agent under its current credit facility, for a new $225 million senior secured revolving credit facility. The Proposed ABL Facility will be used to refinance the company's existing credit facility and support the company's ongoing working capital and general corporate needs. Availability under the facility will be based on a borrowing base including accounts receivable, equipment, inventory, and real estate at customary advance rates. The expected closing date is on or about June 30, 2017, subject to customary closing conditions including negotiation and execution of definitive agreements, due diligence, and requisite approvals.

In addition to pursuing the Proposed ABL Facility, Celadon is reviewing multiple other alternatives to address its short and long-term liquidity needs.  The closing of the Proposed ABL Facility and other certain other financing or sale transactions are included in thecompany's liquidity plan. The company has engaged Stephens Inc. to assist in reviewing its corporate strategy.

Celadon also entered into an amendment of its primary credit agreement that waived certain defaults related to the March 2017 quarter financial covenants and as a result of the withdrawn financial statements, established a new $200 million borrowing limit, and set in motion the perfection of assets, including those that would accompany the proposed new asset-based credit facility. Other amendments included (i) higher interest rates, (ii) revised asset coverage ratio covenant of 0.90 to 1.00 for periods prior to June 30, 2017, (iii) supplemental financial reporting obligations and borrowing conditions, (iv) prohibition on future dividends or stock buybacks, and (v) a capital expenditure limitation.

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