Brunswick
Corporation and GE Commercial Distribution Finance Corporation have entered
into an asset-based loan (ABL) facility, secured by the domestic accounts
receivable of Mercury Marine, a division of Brunswick. The ABL facility totals $100
million, and includes provisions to increase the size to $120 million to
accommodate seasonal fluctuations in receivable balances. On May 29, the amount
outstanding on the ABL facility was $81 million.

 

The ABL
facility replaces Brunswick's existing accounts receivable sale program,
pursuant to which Brunswick had sold the domestic Mercury Marine receivables to
Brunswick Acceptance Company, LLC (BAC), a joint venture between Brunswick
Financial Services Corporation, a Brunswick subsidiary, and CDF Ventures, LLC,
a subsidiary of GE Capital Corporation.

 

Borrowings
under the ABL facility will be reported as short-term debt on Brunswick's consolidated balance sheets, with
borrowing costs reflected in interest expense. The previous program was
structured as a sale of receivables, and consequently, no debt was reflected on
the Company's balance sheet. The cost of the previous program was reflected in
“other income and expense” as a discount on the sale of receivables.
The overall cost of the ABL facility is modestly higher than the previous
receivable sale program, and reflects the current lending environment.

 

The ABL
facility is committed through the term of the joint venture agreement, and is
incremental to the $1.0 billion secured borrowing facility provided by GECDF to
BAC. In addition, the change will not otherwise impact the joint venture's
inventory floor-plan finance program.

 

Brunswick
Corp's businesses include: Mercury and Mariner outboard engines; Mercury
MerCruiser sterndrives and inboard engines; MotorGuide trolling motors; Arvor,
Bayliner, Bermuda, Boston Whaler, Cabo Yachts, Crestliner, Cypress Cay, Harris,
Hatteras, Kayot, Lowe, Lund, Maxum, Meridian, Ornvik, Princecraft, Quicksilver,
Rayglass, Sea Ray, Sealine, Triton, Trophy, Uttern and Valiant boats; Attwood
marine parts and accessories; Land 'N' Sea, Kellogg Marine, Diversified Marine
and Benrock parts and accessories distributors; Life Fitness and Hammer
Strength fitness equipment; Brunswick bowling centers, equipment and consumer
products; Brunswick billiards tables and foosball tables.