BEASLEY BROADCAST GROUP, INC. (NASDAQ:BBGI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
On June 30, 2020, Beasley Mezzanine Holdings, LLC (the “Borrower”), a wholly owned subsidiary of Beasley Broadcast Group, Inc. (the “Company”), entered into Amendment No. 2 to Credit Agreement (the “Amendment”), which amends the Credit Agreement, dated as of November 17, 2017, by and among the Company, the Borrower, the other guarantors party thereto, U.S. Bank, National Association (“U.S. Bank”), as administrative agent and collateral agent, and the other lenders party thereto (as previously amended, the “Credit Agreement”).
The Amendment modifies the Credit Agreement to, among other things, (i) increase the interest rate applicable to the term loans and revolving credit facility by 25 basis points per annum, (ii) add fees of 300 basis points payable on December 31, 2021 and 150 basis points payable on December 31, 2022, if the credit agreement is not refinanced prior to such time, (iii) impose additional reporting requirements, (iv) revise the Excess Cash Flow prepayment requirement such that when the Total Leverage Ratio is greater than 4.5x, 75% of Excess Cash Flow must be prepaid, with such prepayment amounts stepping down to 50%, 25% and 0% upon achievement of certain Total Leverage Ratio milestones, and (v) reduce the flexibility to incur certain additional indebtedness, liens and investments and make certain restricted payments, subject to the achievement of certain leverage based milestones.
Additionally, the Amendment modified the financial covenant to remove the maximum First Lien Leverage Ratio previously tested quarterly through the fiscal quarter ended March 31, 2020. In its place, the Amendment added (i) a minimum liquidity covenant of $8.5 million, which will be tested every other week until the Total Leverage Ratio is less than 5.0x, (ii) a minimum EBITDA covenant, which will be tested monthly beginning October 31, 2020 through June 30, 2021 and (iii) a maximum First Lien Leverage Ratio covenant, which will be tested quarterly beginning with the fiscal quarter ending September 30, 2021. The Amendment also modifies the definition of Consolidated EBITDA to remove certain add-backs with respect to the calculation of Consolidated EBITDA and EBITDA for financial covenants and other similar calculations and reduces the amount of cash that can be netted for the calculation of the First Lien Leverage Ratio for purposes of testing the First Lien Leverage Ratio financial covenant, when applicable.
Also, as a condition to entering into the Amendment, George Beasley, the Company’s Chairman, provided a $5 million loan to the Company that will accrue payment-in-kind interest at 6% per annum with no cash payments due until the loan’s maturity in December 2023. Mr. Beasley and GGB Family Limited Partnership will also each enter into standby letters of credit in combined aggregate face amount of $5 million in favor of U.S. Bank for the benefit of the Company as a source of backup liquidity that may be drawn by U.S. Bank in the event that the Company fails to maintain the Minimum Liquidity Amount.
This description of the Amendment does not purport to be complete and is subject in all respects to the full text of the Amendment, filed with this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
(d) Exhibits
