Huffy Corporation has finalized a $15.0 million subordinated term loan with Ableco Finance LLC, a fund affiliated with Cerberus Capital Management, L.P., and Congress Financial Corporation (Central). The loan, repayable at maturity, has a final maturity date of March 13, 2008, bears interest at the U.S. prime rate plus 7.0% and includes certain financial covenants by the Company. The Company’s $75.0 million revolving loan and security agreement with Congress Financial remains in place.
Don R. Graber, Chairman, President and CEO, commented, “We are extremely pleased that we have been able to work with Ableco Finance LLC and Congress Financial to put in place a more appropriate financing structure to support our vision of long-term growth. As Huffy took the first steps in realizing our vision of creating a diversified branded sporting goods and services to retail company with the recent acquisition of Gen-X Sports and the McCalla Companies, we recognized that we also needed to address our capital structure. The new financing arrangement, with a combination of the term loan and our existing revolver, allows us greater flexibility and enables us to better fund future growth.”