REVLON, INC. (NYSE:REV) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry Into a Material Definitive Agreement.
Amendment of Revolving Credit Agreement and Certain Security Agreements; Addition of Senior Secured First In, Last Out Tranche B to Revolving Credit Facility
On April 17, 2018 (the “Closing Date”), Revlon Consumer Products Corporation (“Products Corporation”), the direct wholly-owned operating subsidiary of Revlon, Inc. (“Revlon” and together with Products Corporation, the “Company”), Revlon and certain of their subsidiaries entered into an amendment and restatement (the “Amendment”) of Products Corporation’s asset-based revolving credit agreement with Citibank, N.A., acting as administrative agent, collateral agent, issuing lender, local fronting lender and swingline lender and the other issuing lenders (the “Existing Revolving Credit Agreement” and as amended by the Amendment, the “Amended Revolving Credit Agreement”) in respect of Products Corporation’s existing senior secured asset-based revolving credit facility (the “Existing Revolving Credit Facility” and as in effect after the Amendment, the “Amended Revolving Credit Facility”). The parties also entered into an amendment to certain related security agreements.
to the terms of the Amendment, a new $41.5 million senior secured first in, last out tranche (the “Tranche B”) was established under the Amended Revolving Credit Facility and the existing $400 million tranche under the Existing Revolving Credit Facility became a senior secured last in, first out tranche (the “Tranche A”, and together with the Tranche B, the “Tranches”).
The Amendment provides for the availability and repayment terms of each Tranche, as well as terms governing the payment priorities between the Tranches. Other amendments to the Existing Revolving Credit Facility under the Amendment include (i) an adjusted cap on incremental facilities (after giving effect to the Tranche B) equal to the greater of (x) $33.5 million and (y) the excess of the borrowing base over the amounts of then-effective commitments; (ii) an increase of $15 million to the cap on amounts eligible for inclusion in the borrowing base relating to certain assets located in jurisdictions other than the U.S., Puerto Rico, Canada, and the U.K.; (iii) a reduction to the amount of additional debt generally permitted to be incurred; (iv) a reduction in the amount of incremental debt under Products Corporation’s $1,800 million senior secured term loan facility permitted to be incurred to the Amended Revolving Credit Agreement; (v) the removal of temporary increases to the borrowing base between August15 and October31 of each year; (vi) an increase to threshold conditions in respect of the ability to make certain dividends and distributions on equity during the term of the Tranche B; and (vii) an amendment to the calculation of the financial covenant.
The borrowing base calculation under the Amended Revolving Credit Facility for the Tranche B is based on the sum of: (i) 10% of eligible accounts receivable; and (ii) the lesser of 10% of the net orderly liquidation value and a percentage of the value specified in respect of different types of eligible inventory, which are collectively subject to certain availability reserves set by the administrative agent.
The borrowing base calculation under the Amended Revolving Credit Facility for the Tranche A continues to be based on the sum of: (i) 85% of eligible accounts receivable; (ii) the lesser of 85% of the net orderly liquidation value and a percentage of the value specified in respect of different types of eligible inventory; (iii) the lesser of (A) the sum of (x) 75% of the net orderly liquidation value in respect of eligible equipment and (y) 75% of the mortgage value of eligible real property and (B) $40 million and (iv) qualified restricted cash (capped at $75 million), which are collectively subject to certain availability reserves set by the administrative agent.
Tranche B under the Amended Revolving Credit Facility matures on the 1st anniversary of the Closing Date, i.e., April 17, 2019. Tranche A under the Amended Revolving Credit Facility continues to mature on the earlier of: (x) the 5th anniversary of the Company’s September 7, 2016 acquisition of Elizabeth Arden, Inc. (i.e., September 7, 2021); and (y) the 91st day prior to the maturity of Products Corporation’s 5.75% Senior Notes if, on that date (and solely for so long as), (i) any of Products Corporation’s 5.75% Senior Notes remain outstanding and (ii) Products Corporation’s available liquidity does not exceed the aggregate principal amount of its then outstanding 5.75% Senior Notes by at least $200 million.
Interest is payable quarterly and accrues on borrowings under the Amended Revolving Credit Facility at a rate per annum equal to either: (i)the alternate base rate plus an applicable margin equal to (A) in the case of the Tranche A, 0.25%, 0.50% or 0.75% or (B) in the case of the Tranche B, 1.50%, 1.75% or 2.00%, in each case depending on the average excess availability (based on the borrowing base as most recently reported by Products Corporation to the administrative agent from time to time); or (ii)the Eurocurrency rate plus an applicable margin equal to (A) in the case of the Tranche A, 1.25%, 1.50% or 1.75% or (B) in the case of the Tranche B, 2.50%, 2.75% or 3.00%, in each case depending on the average excess availability (based on the borrowing base as most recently reported by Products Corporation to the administrative agent from time to time), at Products Corporation’s option. The applicable margin decreases as average excess availability under the Amended Revolving Credit Facility increases. Products Corporation is obligated to pay certain fees and expenses in connection with the Amended Revolving Credit Facility, including a commitment fee of 0.25% for any unused amounts under the Tranche A and 0.50% for any unused amounts under the Tranche B. Loans under the Amended Revolving Credit Facility may be prepaid without premium or penalty.
Item 2.03. Creation of a Direct Financing Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Please see the discussion set forth under Item 1.01, “Entry into a Material Definitive Agreement,” of this Form 8-K, which discussion is incorporated herein by reference in its entirety.
Item 9.01. Exhibits.
(d)Exhibits.
|
Exhibit No. |
Description |
|
4.1 |
Amendment No. 1, dated as of April 17, 2018, among Revlon Consumer Products Corporation, Revlon, Inc., the other loan parties and lenders party thereto, and Citibank, N.A. |
|
4.2 |
Amendment Agreement No. 1 to Canada – ABL Collateral Agreement, dated as of April 17, 2018, among Revlon Canada Inc., Elizabeth Arden (Canada) Limited and Citibank, N.A. |
REVLON INC /DE/ ExhibitEX-4.1 2 a51791577ex4_1.htm EXHIBIT 4.1 Exhibit 4.1 AMENDMENT NO. 1,…To view the full exhibit click here
About REVLON, INC. (NYSE:REV)
Revlon, Inc. manufactures, markets and sells around the world a range of beauty and personal care products, including color cosmetics, hair color, hair care and hair treatments, as well as beauty tools, men’s grooming products, anti-perspirant deodorants, fragrances, skincare and other beauty care products. The Company operates through three segments: Consumer, which includes cosmetics, hair color and hair care, beauty tools, anti-perspirant deodorants, fragrances and skincare products; Professional, which includes a line of products sold to hair and nail salons, and professional salon distributors, including hair color, shampoos, conditioners, styling products, nail polishes and nail enhancements, and Other, which includes the distribution of prestige, designer and celebrity fragrances, cosmetics and skincare products, such as Burberry and Rihanna branded products. The Company also offers Elizabeth Arden portfolio of brands, including its designer, heritage and celebrity fragrances.