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.