Business Context and Reporting Period
This Form 8-K Current Report was filed by Lindblad Expeditions Holdings, Inc. (LIND) on February 4, 2022. The filing details the entry into material definitive agreements to restructure the company's debt capitalization. The company is a Delaware corporation with principal executive offices in New York, New York.
Key Financial Metrics and Debt Structure
The filing focuses on the issuance of new debt and the establishment of a new credit facility rather than operational financial performance metrics such as revenue or profit.
- New Debt Issuance: $360,000,000 aggregate principal amount of 6.750% Senior Secured Notes due 2027.
- Interest Rate: 6.750% per annum, payable semiannually in arrears beginning August 15, 2022.
- Maturity Date: February 15, 2027.
- New Credit Facility: A senior secured revolving credit facility with an aggregate principal amount of $45.0 million, maturing in February 2027.
- Letter of Credit Sub-facility: Up to $5.0 million included within the revolving facility.
- Security: Both the Notes and the New Credit Facility are secured by first-priority liens on substantially all assets of the Issuer and guarantors.
Material Changes Versus Prior Period
The primary material change is the refinancing of the company's existing debt structure. The company intends to use the net proceeds from the $360 million Notes offering to:
- Prepay in full all outstanding borrowings under its existing term loan, including the Main Street loan.
- Prepay in full all outstanding borrowings under its existing revolving credit facility.
- Pay related premiums and terminate the Existing Credit Agreement and its commitments.
This transaction replaces the previous credit agreement with a new indenture and a new revolving credit facility.
Guidance, Outlook, and Covenants
The filing does not provide operational guidance, revenue outlook, or management commentary on future business performance. However, it outlines significant financial covenants and restrictions associated with the new debt instruments:
- Covenants: The Indenture and Revolving Credit Agreement restrict the ability to incur additional indebtedness, issue preferred stock, make dividend payments, sell assets, merge, or enter into certain affiliate transactions.
- Redemption Terms:
- Pre-February 15, 2024: Redeemable at 100% of principal plus a "make-whole" premium.
- Post-February 15, 2024: Redeemable at prices set forth in the Indenture.
- Equity Redemption: Prior to February 15, 2024, up to 40% of the Notes may be redeemed at 106.750% of principal using proceeds from specified equity offerings.
- Change of Control: If certain change of control events occur, the Issuer must offer to repurchase the Notes at 101% of their principal amount.
Investor Verification Checklist
- Verify the full text of the Indenture (Exhibit 4.1) and Revolving Credit Agreement (Exhibit 10.2) for specific covenant thresholds and exceptions.
- Confirm the exact amount of the "Main Street loan" and other existing debt being prepaid to assess the net cash impact.
- Review the "make-whole" premium calculation methodology in the Indenture for early redemption scenarios.
- Monitor the company's ability to meet the new financial covenants under the Revolving Credit Agreement.
- Check for any subsequent filings regarding the utilization of the $45 million revolving facility.