Hostess Brands Refinances First Lien Term Loan

Shares of Hostess Brands were barely higher Monday after the packaged food company said it expects full-year annualized interest expense savings of $5 million or up to $0.02 per share as a result of a repricing of its existing first lien term loan.

The first lien term loan was repriced to LIBOR plus 2.5% from LIBOR plus 3.0%. The LIBOR floor was reduced to 75 basis points from 100 basis points with no covenants changed. The loan continues to have a maturity date of August 3, 2022. For 2017, Hostess Brands expects interest expense of $39 million to $41 million, which is a savings of $0.01 to $0.02 per share, based on the repricing as well as the company’s expectation of future LIBOR.

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