One day removed from denying any knowledge of a published report that it is for sale, Topgolf Callaway Brands Corp. (NYSE: MODG) today announced the repricing of its term loan, thereby lowering its future interest costs.
The company said it repriced the existing $1.24 billion first-lien term loan due 2030; lowered the first-lien term loan interest rate by 50 basis points, to SOFR +300; and eliminated the 10-basis point credit spread adjustment (CSA) for a total reduction of 60 basis points
Interest expense savings, the company said, are expected to be greater than $7 million on an annualized basis.
“We are pleased to announce the successful completion of our debt repricing, which will lower our annual interest expense while continuing to provide the company with ample liquidity,” said Brian Lynch, Chief Financial Officer and Chief Legal Officer at Topgolf Callaway Brands. “This repricing is consistent with our focus on managing overall leverage while maintaining the financial flexibility and liquidity needed to fund the continued growth of our business, a business which delivered positive free cash flow at both the total Company and Topgolf in 2023 and is forecast to do so again in 2024.”
Bank of America, N.A., JPMorgan Chase Bank, N.A., MUFG Securities Americas Inc., and Truist Securities, Inc. acted as Joint Lead Arrangers and Joint Bookrunners.
Today‘s announcement (after Market close) likely has nothing to do with yesterday’s report in the South Korea paper, “The Chosun Daily,” three major shareholders could be looking to sell Topgolf Callaway Brands.
The company’s stock closed today at $15.58, down from yesterday’s close ($15.66). The report of potential sale could be nothing more than angry shareolders trying to set a fire under management to improve stock price.