Big 5 Sporting Goods Corporation announced that it has entered into a new loan agreement with Bank of America as administrative agent and lender.
The Loan Agreement has a five-year term which matures in February 2026 and provides for a secured revolving credit facility with aggregate committed availability of up to $150 million. The Company may request additional increases in aggregate availability, which the lender has the option to provide, up to $200 million. Loans under the new credit facility will bear interest based on LIBO rates or a specified base rate (generally Bank of America’s prime rate), plus a margin that is determined based on the remaining availability under the credit line. The margin on LIBO rate loans ranges from 1.375% to 1.50% and the margin on base rate loans ranges from 0.375% to 0.50%, subject to interest rate floors of zero. The commitment fee assessed on the unused portion of the credit facility is 0.20% per annum.
Barry Emerson, the Company’s Chief Financial Officer, stated, “We are pleased to put a new credit facility in place on such favorable terms. We believe this facility underscores the strength of our financial condition, as we remain debt-free with a cash balance of $64.7 million as of the end of fiscal 2020. We appreciate the support of Bank of America, as this multi-year facility is expected to help provide the financial flexibility to support our business through the current dynamic retail environment and over the long-term.”
The Loan Agreement replaces the Company’s prior financing arrangement.