Surfwear and extreme sports clothing maker Billabong International Limited has secured a $294 million proprietary loan to boost their working capital and refinance an existing loan. FS Investment Corporation, FS Investment Corporation II, and Altamont Capital Partners have provided the proprietary financing. In a press release, the loan carries an interest rate of 12% per year and will mature on December 31, 2013. The proprietary loan also contains call protections. The agreement also provides the creditors with an option to get a 15% equity stake in the manufacturing company.
In addition to the said loan, Billabong has also agreed with its 3 creditors for longer-term financing. This comes in the form of a 5-year term loan worth $254 million to repay the bridge loan.The company has already signed a commitment letter with FS Investment Corporation, FS Investment Corporation II, and Altamont for the purpose. The term loan also carries a 12% interest with 7% to be paid in cash and the remaining 5% in-kind. FSIC II and Altamont have also committed to provide Billabong with $40 million in convertible notes, which if converted into shares would equate to approximately 25% of Billabong's equity.
Join the Conversation