The digital media services provider says it has taken advantage of the current low interest rate environment to make a favorable amendment to its credit facility. DG FastChannel has retired a bridge loan early and increased its term loan facility.
The company announcement said it amended its senior credit facility originally dated March 2008. The amended facility now consists of $148 million in term loans and a $30 million revolving line of credit for a total credit facility of $178 million. The amended senior credit facility will bear interest at LIBOR plus applicable margins of 300-500 bps based on DG FastChannel’s leverage levels. The new term loan will mature in 2013.
Pursuant to the amended credit facility agreement, DG FastChannel repaid its $65 million bridge loan to BMO Capital Markets through the following actions: increasing its current term loan by $40 million, drawing down $20 million on its revolving line of credit, and paying the remainder in cash. Currently, DG FastChannel has total outstanding debt of $168 million. As of December 31, 2008, the company’s reported cash on hand was $17.2 million.
“Our business model and financial position allowed us to amend our credit facility favorably in the current low interest rate environment. The amended senior credit facility provides us with a lower effective interest rate on our debt while maintaining the financial flexibility to continue pursuing our strategies for long-term growth,” said DG FastChannel CFO Omar Choucair.
The bank group is anchored by: BMO Capital Markets (lead arranger), with Bank of America, N.A. and U.S. Bank, N.A. joining the existing bank group including Wells Fargo, Webster Bank, N.A., Citibank, N.A., Fifth Third Bank, First Tennessee Bank, N.A., First Bank, and Bank of the West.
