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JPMorgan Chase Agents $50MM Upsize for Farmer Bros. Co.

August 31, 2017, 07:15 AM
Filed Under: Beverages

Farmer Bros. Co., a Delaware corporation, and China Mist Brands, Inc., together with the Company’s wholly owned subsidiaries, Coffee Bean International, Inc., an Oregon corporation, FBC Finance Company, a California corporation, and Coffee Bean Holding Company, Inc., a Delaware corporation, as additional Loan Parties and as Guarantors, entered into that certain First Amendment to Credit Agreement and First Amendment to Pledge and Security Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent. 

The Amended Credit Agreement increases the aggregate commitments of the senior secured revolving credit facility from $75 million to $125 million. Chase agreed to provide $75 million of the Revolving Commitment and SunTrust Bank agreed to provide $50 million of the Revolving Commitment. The Amended Credit Agreement also includes an accordion feature whereby the Company may increase the Revolving Commitment by an aggregate amount not to exceed $50 million, subject to certain conditions.

The Amended Credit Agreement increases (i) the advance rate on the Borrowers’ eligible accounts receivable that are with investment grade customers from 85% to 90% and (ii) the amount of the Borrowers’ eligible real property which can be included in the Borrowing Base from the lesser of $25 million and 75% of the fair market value of such eligible real property, to the lesser of $60 million and 75% of the fair market value of such eligible real property, subject to certain limitations.

The Amended Credit Agreement provides for an increase to the margin of 0.375% per annum on any drawn loans under the Revolving Facility up to an amount equal to the value of eligible real property in the Borrowing Base. The interest rates are otherwise unchanged in the Amended Credit Agreement and continue to be based on Average Historical Excess Availability levels with a range of Prime Rate -0.25% to Prime Rate +0.50% or Adjusted LIBO Rate +1.25% to Adjusted LIBO Rate +2.00%. The Amended Credit Agreement reduces the commitment fee from a range of between 0.25% to 0.375% per annum based on Average Revolver Usage, to a flat fee of 0.25% per annum irrespective of Average Revolver Usage. The Amended Credit Agreement also extends the maturity date of the Revolving Facility from March 2, 2020 to August 25, 2022.

The Amended Credit Agreement contains a variety of affirmative and negative covenants of types customary in an asset-based lending facility, including financial covenants relating to the maintenance of a fixed charge coverage ratio in certain circumstances. The Amended Credit Agreement also allows the Lenders to establish reserve requirements, which may reduce the amount of credit otherwise available to the Borrowers, and provides for customary Events of Default.

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