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The Dixie Group reports refinancing
16
Sep '11
The Dixie Group, Inc. reported that it has refinanced its senior revolving credit facility together with the existing term loan secured by its Santa Ana property. The purpose of these transactions is to permit early redemption of the outstanding $9.7 million of 7% convertible subordinated debentures due in May of 2012 and to extend the Company's financing for another five-year period.

The transaction, with Wells Fargo Capital Finance, part of Wells Fargo & Company, as Agent and co-lender with Bank of America, consists of a new $90 million revolving credit facility with a five-year term and a term loan secured by the Santa Ana carpet facility, with Wells Fargo Bank, NA as lender. The term loan will increase from $5.5 million to $11.1 million.

The Company has fixed the interest rate on a portion of the variable rate debt represented by these credit facilities, with interest rate swap agreements through September 1, 2016, as part of its ongoing risk management program. Further, the Company intends to announce repurchase of the remaining $9.7 million of outstanding 7% convertible subordinated debentures. The effect of these transactions will be to lower Dixie Group's interest costs, extend its financing until 2016 and provide the financing facilities to accommodate future growth as the Company's markets continue to rebound from the historic downturn of the last four years.

The Dixie Group is a leading marketer and manufacturer of carpet and rugs to higher-end residential and commercial customers through the Fabrica International, Masland Carpets, Dixie Home, Masland Contract and Whitespace brands.

Wells Fargo Capital Finance is the trade name for certain asset-based lending, accounts receivable and purchase order finance services of Wells Fargo & Company and its subsidiaries, and provides traditional asset-based lending, specialized senior secured financing, accounts receivable financing, purchase order financing and channel finance to companies across the United States and Canada.

The Dixie Group


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