HF Foods Group Inc. and B&R Global Holdings, Inc. Enter Second Amended and Restated Credit Agreement
January 21, 2020 at 11:19 am
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On January 17, 2020, HF Foods Group Inc. (HF Group or the Company), its wholly-owned subsidiary, B&R Global Holdings, Inc. (B&R Global), and certain of the wholly-owned subsidiaries and affiliates of the Company (collectively with the Company, the Borrowers), as borrowers, and certain material subsidiaries of the Company as guarantors, entered into a Second Amended and Restated Credit Agreement (the Second Amended Credit Agreement) with JPMorgan Chase Bank, N.A. (JPMorgan), as Administrative Agent, and certain lender parties thereto, including Comerica Bank. The Second Amended Credit Agreement provides for (a) a $100 million asset-secured revolving credit facility maturing on November 4, 2022 (the Facility), and (b) mortgage-secured Term Loans of $75.6 million. The Second Amended Credit Agreement amends and restates the existing $55.0 million of real estate term loans evidenced by that certain Amended and Restated Credit Agreement, dated as of November 4, 2019, among the Company, B&R Global, its affiliates and JP Morgan Chase Bank, N.A., as Administrative Agent and sole lender (the First Amended Credit Agreement). As of January 17, 2020, the existing balance of revolving debt under the First Amended Credit Agreement, $41.2 million, was rolled over, and an additional $18.7 million available to the Company under the Facility was drawn. The Company and B&R used the $75.6 million in mortgage-secured term loans and $18.7 million drawn from the revolving credit facility to fund in part the acquisition of 10 warehouse facilities owned by B&R Group Realty Holding, LLC (B&R Group Realty), which the Company has been leasing for its operations in California, Arizona, Utah, Colorado, Washington, and Montana. Borrowings under the Second Amended Credit Agreement may be used for, among other things, working capital and other general corporate purposes of the Company and its subsidiaries (including permitted acquisitions). The Borrowers have the ability to increase the amount of the Facility, which increases may take the form of increases to the revolving credit commitments, by an aggregate amount of up $30 million upon satisfaction of customary conditions precedent for such increases or incremental loans and receipt of additional commitments by one or more existing or new lenders. Borrowings under the Facility bear interest at a floating rate, which will be, at the Borrowers’ option, either LIBOR plus 1.375%, or a base rate of prime rate minus 1.125%. The Term Loans bear interest at a floating rate, which will be, at the Borrowers’ option, either LIBOR plus 1.875%, or a base rate of prime rate minus 0.625%. A commitment fee of 0.15% is payable monthly in arrears based on the daily amount of the undrawn portion of each lender’s revolving credit commitments under the Facility. Certain of the Company’s existing and future material subsidiaries (collectively, the Guarantors) are required to guarantee the repayment of the Borrowers’ obligations under the Second Amended Credit Agreement. The obligations of the Borrowers and each of the Guarantors with respect to the Second Amended Credit Agreement are secured by a pledge of substantially all of the personal property assets of the Borrowers and each of the Guarantors, including accounts receivables, deposit accounts, intellectual property, investment property, inventory, equipment and equity interests in their respective subsidiaries. Under the Second Amended Credit Agreement, the mortgage liens against the former B&R Group Realty properties were amended, and additional collateral was provided by the Borrowers and Guarantors by grant of mortgage liens against real property owned by Company subsidiaries in North Carolina and South Carolina.
HF Foods Group Inc. is a marketer and distributor of fresh produce, frozen and dry food, and non-food products to primarily Asian/Chinese restaurants and other foodservice customers throughout the United States. The Company's business features approximately 18 distribution centers and cross-docks with over one million square feet of warehouse space and a fleet of over 400 vehicles to provide a variety of products with a focus on Asian specialty food ingredients essential for Asian cooking. The Company offers over 2,000 different products to its customers. Its product categories include seafood, Asian specialty, meat and poultry, fresh produce, packaging and other, and commodity. Its seafood category includes lobster, shrimp, crab, scallops and fish, such as tuna and Alaskan salmon. The Company's fresh produce category includes seasonal fruits and vegetables, such as celery, Chinese cabbage and winter melon. Its meat and poultry category includes beef, pork, chicken and duck.