Horizon Global, one of the leading manufacturers of branded towing and trailering equipment, closed a new financing agreement with Atlantic Park Strategic Capital Fund, L.P. The six-year agreement addresses all of the Company’s near-term maturities, provides long-term stability to its capital structure and offers the financial flexibility necessary to pursue its strategic initiatives. Proceeds received by the Company will be used to:

• Repay in full all outstanding debt under the Company’s existing term loan, which would have otherwise matured on April 1, 2022. As a result of the repayment of all amounts outstanding under the existing term loan, it will be terminated and will no longer be in effect.
• Create a $125.0 million delayed draw term loan with enough capacity to repay all of the Company’s outstanding convertible senior notes at maturity on July 1, 2022. The delayed draw term loan has a nominal ticking fee and the Company is not required to draw any amounts prior to June 30, 2022. When the delayed draw term loan is used to fully repay the converts, the Company will not have any substantial maturities prior to February 2027, other than its asset-based revolving credit facility.

Key benefits to the Company of the new agreement also include:

• Significant reduction in interest rates, with new rate of LIBOR + 750 (1% LIBOR floor).
• Flexible financial covenants. Net leverage ratio covenant, which will be initially tested on March 31, 2023, set with significant headroom to the Company’s forecasted earnings growth and deleveraging.
• Call protection schedule provides significant strategic optionality to the Company. Following a one-year no-call period, the agreement provides for a call premium of 102.5 for each of years two through five and par thereafter.

The new term loan will bear interest at LIBOR + 750 basis points, with a 1% LIBOR floor, and will mature on February 2, 2027. In connection with the new term loan, the Company issued to Atlantic Park warrants to purchase up to 10.0% of the Company’s pro forma fully diluted shares of common stock at an exercise price of $9.00 per share. The warrants have a five-year term, provide alignment between Atlantic Park and the Company’s shareholders as well as reflect Atlantic Park’s confidence in the growth and long-term value of the Company. Matthew Bonanno will join the Horizon Global board of directors as an observer.

Jefferies served as the exclusive financial advisor to Horizon Global on the transaction.