FTD Cos. Refinances Ahead of SpinoffThursday, July 18, 2013
Flower-delivery company FTD Cos. Inc. has received a $350 million five-year revolving credit line to refinance its senior secured debt as it prepares to go public.
The company, a subsidiary of Woodland Hills Internet access provider United Online Inc., announced the agreement with several national lenders, including Bank of America and Wells Fargo.
FTD immediately accessed $220 million of the facility and used $19 million to pay down existing credit facilities, as well as fees and expenses related to the new facility.
The debt carries interest rates that range from as low as 1.25 percent to as high as 4 percent, depending on FTD’s debt leverage ratio and a fluctuating base rate set to the London Interbank Offered Rate (LIBOR). It is expected to save the company $7 million in interest payments annually.
“One of the key benefits of the new credit agreement is that, based on today's LIBOR rates, we believe this significant annual interest savings will more than offset the public company costs FTD will incur once the tax-free spin-off is complete,” said FTD President Robert S. Apatoff in a prepared statement.
In April, United Online filed its initial registration statement for its FTD spinoff with the Securities and Exchange Commission. An initial public offering is expected in the third quarter.
Apatoff will become the company’s chief executive after FTD goes public, while United Online Chief Executive Mark Goldston is expected to leave the parent company.
Shares of United Online closed up 18 cents, or 2.3 percent, to $8.08 on the Nasdaq.