Colt Defense Secures Loan, Eases Financial pressures
Colt Defense got in hot water recently; there was some uncertainty over whether the manufacturer would default on its outstanding loans. The firm recently announced good news regarding their financial troubles, however, as they were able to secure a loan for $33 million. HeraldOnline.com reports:
WEST HARTFORD, CONN. — Colt Defense LLC (“Colt”) announced today that it has entered into a new senior secured term loan facility with Cortland Capital Market Services LLC, as agent, and certain lender parties thereto (the “Cortland Facility”). The Cortland Facility provides for a term loan of $33 million, which includes the arrangement of certain cash collateralized letters of credit in an aggregate face amount of up to $7 million, of which approximately $5 million will be used in connection with the termination of Colt’s existing revolving credit agreement. Proceeds from the Cortland Facility will be used to repay all amounts outstanding under Colt’s existing revolving credit agreement and terminate such revolving credit agreement, for cash collateral for certain letters of credit, to pay fees incurred in connection with the consummation of the Cortland Facility and the termination of the existing revolving credit agreement, for additional liquidity and for general working capital purposes. The Cortland Facility provides for the accrual of interest at a fixed rate of 10% per annum and matures August 15, 2018. The lenders under Colt’s existing term loan agreement dated as of November 17, 2014 (the “Term Loan Agreement”) have also agreed to amendments to the Term Loan Agreement necessary for Colt to enter into the Cortland Facility.
Being a loan, this only delays Colt’s problems. They will need to secure more large government orders and ramp up their civilian marketing efforts to offset the hit they have taken in the past few years.
We covered Colt’s financial troubles more in depth last year, in November when there was a great deal of uncertainty about the future of the company.
Nathaniel is a history enthusiast and firearms hobbyist whose primary interest lies in military small arms technological developments beginning with the smokeless powder era. He can be reached via email at nathaniel.f@staff.thefirearmblog.com.
More by Nathaniel F
![[NRAAM 2024] The NEW Shadow Systems CR920X](https://cdn-fastly.thefirearmblog.com/media/2024/06/04/0643121/nraam-2024-the-new-shadow-systems-cr920x.jpg?size=350x220)
![[GunCon 2024] New Brownells Gunsmith Vise & Accessories](https://cdn-fastly.thefirearmblog.com/media/2024/07/04/09301/post.jpg?size=350x220)
Comments
Join the conversation
Simple solution for Colt, make guns and lots of them. Make 1911s configured the way people want them, like Ruger, CZ, Dan Wesson, Springfield, Kimber, and all the rest. Do some research for goodness sakes. I would love to have one of their Marine addition 1911s but at their price I could buy a killer Nighthawk Custom.
They have been overpriced for too long. Being rare doesn't create value, that's only half of the economic puzzle. There are too many equivalents, what they do have is brand recognition and they need to put that to use.
They need to look beyond the government market they were so enamored with for so long and look to what civilians want. And they really need to look beyond the ar-15 because there is huge competition there. The civilian market will keep you afloat a lot better than waiting for the government to come back. The biggest problem for colt is that they have been stuck in the golden age of the 1960s. Bring back more of the nostalgia line for a decent price. Innovate new product lines. Diversify your products. There is more to guns than 1911s and ar-15s. Create new products and innovate.