With whom did Management Recruiters enter into the Revolving Credit and Term Loan Agreement?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
credit that secures our paycard funding account. For additional information related to the letter of credit securing our workers' compensation obligations see Note 5 - Workers' Compensation Insurance and Reserves.
Revolving Credit and Term Loan Agreement with Truist Bank
On June 29, 2021 the Company and all of its subsidiaries as borrowers (collectively, the "Borrowers") entered into a Revolving Credit and Term Loan Agreement with Truist Bank, as Administrative Agent, and the lenders from time to time made a party thereto (the "Truist Credit Agreement"), pursuant to which the lenders extended the Borrowers (i) a $60 million revolving line of credit with a $20 million sublimit for letters of credit (the "Line of Credit") and (ii) a $3,153,500 term loan (the "Term Loan"). Truist Bank may also make Swingline Loans available in its discretion. Interest accrued on the outstanding balance of the Line of Credit at a variable rate equal to (a) the LIBOR Index Rate plus a margin between 1.25% and 1.75% per annum or (b) the then applicable Base Rate, as that term is defined in the Credit Agreement plus a margin between 0.25% and 0.75% per annum. In each case, the applicable margin was determined by the Company's Average Excess Availability on the Line of Credit, as defined in the Credit Agreement. Interest accrued on the Term Loan at a variable rate equal to (a) the LIBOR Index Rate plus 2.0% per annum or (b) the then applicable Base Rate plus 1.0% per annum. In addition to interest on outstanding principal under the Truist Credit Agreement, the Borrowers paid a commitment fee on the unused portion of the Line of Credit in an amount equal to 0.25% per annum. All loans made pursuant to the Line of Credit were to mature on June 29, 2026. The Term Loan was based upon a 15-year amortization of the original principal amount of the Term Loan with the remaining principal balance due and payable in full on the earlier of the date of termination of the commitments on the Line of Credit and June 29, 2036.
Term Loan
In connection with the Northbound acquisition, we entered into an amortizing term loan from the seller for $1.5 million scheduled to mature on March 1, 2025 that bears interest at 4.0%. The Northbound term loan is unsecured and subordinated to the Senior Credit Facility.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, on June 29, 2021, Management Recruiters and its subsidiaries entered into a Revolving Credit and Term Loan Agreement with Truist Bank, acting as the Administrative Agent, and the lenders who were party to the agreement. This agreement included a $60 million revolving line of credit, with a sublimit of $20 million for letters of credit, and a $3,153,500 term loan. Truist Bank had the discretion to make Swingline Loans available.
Interest on the line of credit accrued at a variable rate based on either the LIBOR Index Rate plus a margin between 1.25% and 1.75% per annum, or the Base Rate plus a margin between 0.25% and 0.75% per annum. The specific margin was determined by Management Recruiters' Average Excess Availability on the Line of Credit. The term loan accrued interest at a variable rate of either the LIBOR Index Rate plus 2.0% per annum, or the Base Rate plus 1.0% per annum. In addition to interest, Management Recruiters paid a commitment fee of 0.25% per annum on the unused portion of the line of credit.
The loans under the line of credit were set to mature on June 29, 2026. The term loan was based on a 15-year amortization schedule, with any remaining principal due on the earlier of the line of credit termination date or June 29, 2036. However, the FDD also states that on February 28, 2023, Management Recruiters entered into a new Revolving Credit and Term Loan Agreement with Bank of America, N.A., replacing the previous agreement with Truist Bank. This new agreement provided a $50 million revolving facility, including a $20 million sublimit for letters of credit, and is set to mature on February 28, 2028.