Dallas-based Builders FirstSource announced the completion of a $160 million first-lien Term Loan financing agreement with affiliates of Highbridge Principal Strategies.
The company also announced it had entered into a standalone letter of credit facility with SunTrust Bank, which provides for the issuance of up to $20 million of letters of credit.
With the proceeds, the LBM dealer intends to repay the $20 million outstanding under the current revolving credit facility, use $14.2 million to collateralize letters of credit outstanding under the new LC Facility, and pay fees and expenses related to the transaction.
"This financing transaction strengthens our liquidity and positions us to take full advantage of the expected recovery in housing," said Floyd Sherman, Builders FirstSource CEO.
Sherman added that improvement in 2011 financial results allowed the deal to happen -- sales in November have exceeded the company's expectations.
"Our sales results through November have exceeded our expectations, delaying the anticipated seasonal reduction in working capital typically seen by this point in the year," Sherman said. "Our liquidity has also enabled us to take advantage of opportunistic inventory buys to protect customer pricing as we head into 2012."
Upon receipt of the $119.6 million in net proceeds related to this transaction, Builder FirstSource's cash balance was about $150 million, and net liquidity was about $115 million after giving effect to a $35 million minimum cash requirement contained in the term loan.