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BofA, Wells Fargo Securities Arrange FTD’s New $350MM Facility

July 18, 2013, 07:09 AM
Filed Under: Retail

United Online, Inc., a provider of consumer products and services over the Internet, announced that its wholly-owned subsidiary, FTD Companies, Inc. (FTD), has entered into a new credit agreement with various lenders, Bank of America Merrill Lynch and Wells Fargo Securities, LLC, as joint lead arrangers and book managers, and Bank of America, N.A., as administrative agent for the lenders, to refinance the existing senior secured credit facilities of FTD Group, Inc.

The credit agreement provides FTD with a $350 million five-year secured revolving credit facility and certain other financial accommodations including letters of credit. At closing earlier today, FTD drew $220 million of the new $350 million revolving credit facility and used approximately $19 million of its existing cash balance to repay its previously outstanding credit facilities in full and pay fees and expenses related to the credit agreement.

The interest rates set forth in the credit agreement are either a base rate plus a margin ranging from 0.50% per annum to 1.25% per annum, or LIBOR plus a margin ranging from 1.50% per annum to 2.25% per annum calculated according to FTD’s net leverage ratio. The initial base rate margin is 0.75% per annum and the initial LIBOR margin is 1.75% per annum. The credit agreement also permits the previously announced spin-off of FTD from United Online.

“The refinancing of FTD's credit facilities is an important step as we progress toward the planned spin-off of FTD from United Online. This new credit agreement reduces FTD's cost of debt by approximately $7 million annually based on current LIBOR rates and provides FTD with substantial capital and financial flexibility going forward,” said Mark R. Goldston, chairman, president and chiefexecutive officer of United Online.

“One of the key benefits of the new credit agreement is that, based on today's LIBOR rates, we believe this significant annual interest savings will more than offset the public company costs FTD will incur once the tax-free spin-off is complete,” added Robert S. Apatoff, president of FTD Companies, Inc.

United Online, through its operating subsidiaries, is a leading provider of consumer products and services over the Internet, where their respective brands have attracted a large online audience that includes more than 100 million registered accounts worldwide. The company’s FTD segment provides floral-related products and services (FTD, Interflora, Flying Flowers, and Flowers Direct) for consumers and retail florists, as well as other retail locations offering floral and related products and services.

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