KANSAS CITY — Hostess Brands, Inc. has completed a strategic refinancing of debt the company said would generate considerable annual savings.
Under the transaction, the company’s first lien term loan was lowered 50 basis points to LIBOR plus 2.5% versus LIBOR plus 3%. Additionally, the LIBOR floor was lowered to 75 basis points from 100. Loan covenants were left unchanged as was the maturity date of Aug. 3, 2022.
The repricing is expected to generate annualized interest expense savings of $5 million, or 2c per share on the common stock, net of income taxes. In 2017, Hostess is predicting interest expense of $39 million to $41 million, generating savings of 1c to 2c per share.
William D. Toler, president and chief executive officer, noted that the favorable term loan repricing was the company’ s second in the last six months.
|William Toler, president and c.e.o. of Hostess|
“This latest repricing further improves our capital structure and provides our business with additional financial flexibility to support our continued long-term growth,” he said.Hostess’ long term debt and capital lease obligations as of March 31 totaled $990,589,000 – the amount affected by the refinancing.