Rocky Brands, Inc. has received a financing commitment, subject to customary closing conditions, from PNC Bank for a revolving credit facility totaling $70 million. The new credit facility will replace the company's existing revolving credit facility, the remaining balance of approximately $11 million under term loans, and the remaining balance of approximately $2 million under mortgage loans. The term of the new credit facility will be five years and the initial interest rate will be LIBOR plus 1.75%.
Mike Brooks, chairman and CEO, commented, “We are very pleased to have secured this new credit facility and believe it underscores the confidence our lender has in the company's future prospects. Importantly, with more favorable terms, we anticipate this new revolving credit facility will reduce our annual interest expense by approximately $2 million next year while at the same time providing us with less expensive capital to expand our business over the next five years.”
The transaction is anticipated to close in October 2010. The company expects to recognize a non-cash charge of approximately $1 million in the fourth quarter of 2010 representing deferred financing costs relating to the extinguishing of the current credit facility, term loans and mortgage loans described above.
