The Dixie Group, Inc. on Monday announced the successful negotiation of a $75 million, five year, senior secured revolving credit facility with Fifth Third Bank National Association providing for borrowing based on percentages of values of the company's accounts receivable and inventory, and secured by a first priority interest in the company's accounts receivable and inventory. Maturing five years from the date of close, the Fifth Third facility will replace the company's current secured credit facility with Wells Fargo Finance scheduled to mature in 2021. Availability under the new arrangement will be approximately $45 million as of Oct. 30.
The company also announced entry into two additional credit facilities: a $10 million principal amount 25-year term loan with AmeriState Bank, secured by a first mortgage on the company's Atmore, Alabama and Roanoke, Alabama facilities, and a $15 million 10-year loan with Greater Nevada Credit Union secured by the company's machinery and equipment, and a second lien on the Atmore and Roanoke Facilities. The AmeriState loan bears straight line amortization over the 25-year term, and the Greater Nevada Credit Union loan amortizes straight line over the last seven years of its 10 year term.
Together, the Fifth Third Facility and the AmeriState and Greater Nevada Credit Union loans will serve to consolidate and replace most of the company's existing credit arrangements.
Commenting on the announcement, Chairman and Chief Executive Officer Daniel K. Frierson said, "Management is pleased to announce entry into these credit facilities. This provides us secured financing over the next five to 25 years. The simplified debt structure and substantial increase in availability will afford the company the credit it needs to address challenges we may face in the future and to fund growth in the company's residential hard and soft surface businesses."