Company Makes $7.0 Million Semi-Annual Interest Payment on 4.25% Convertible Notes within Grace Period. Refinancing of Company's Capital Structure on Schedule.
Horizon Lines, Inc. (NYSE: HRZ) today announced that it has closed on a bridge loan facility of up to $25.0 million from certain of its 4.25% convertible note holders, as part of the comprehensive refinancing agreement between the company and its note holders announced late last month. The company also reached an agreement with its existing bank group to amend its current credit facility to accommodate the bridge loan.
The company also has made the $7.0 million semi-annual interest payment on its existing $330.0 million of 4.25% convertible notes. The interest payment was originally due on August 15, 2011, but the company elected to make the payment within the 30-day grace period. "We very much appreciate the support of both our note holders and lender group as we proceed with a transaction that will culminate in the comprehensive refinancing of the company's capital structure," said Michael T. Avara, Executive Vice President and Chief Financial Officer. "Our refinancing remains on schedule and the new bridge loan, when combined with existing revolver availability, provides us with more than $35 million of liquidity to bridge the company to the closing of the refinancing." At the closing of the refinancing of the company's capital structure, the $25.0 million amount of the bridge loan will be exchanged for a like principal amount of debt that will be included in the $100.0 million of new second-lien 13%-to-15% secured notes to be issued as part of the refinancing. A copy of the amendment to the existing credit agreement and the bridge loan agreement will be included as an exhibit to a current report on Form 8-K to be filed with the SEC.
