Hillman Successfully Reprices Senior Term Loan Lowering Interest Expense
Hillman Solutions Corp. (HLMN) has successfully repriced its $643 million Term Loan due July 14, 2028, reducing the interest rate margin by 25 basis points to SOFR + 200 basis points. This adjustment is expected to generate annual interest savings of approximately $1.6 million, with one-time fees of about $1.0 million.
Since March 2024, the spread between Hillman's term note borrowing cost and SOFR has decreased by 86 basis points total, comprising 61 basis points from repricing and 25 basis points from qualifying for a lower spread due to leverage-based pricing. The company expects to conclude 2024 with a Net Debt to Adjusted EBITDA leverage ratio of 2.7 times. Management plans to focus on debt repayment, investing in profitable growth opportunities, and pursuing accretive tuck-in acquisitions.
Hillman Solutions Corp. (HLMN) ha con successo riprezzato il suo prestito a termine di $643 milioni in scadenza il 14 luglio 2028, riducendo il margine del tasso d'interesse di 25 punti base a SOFR + 200 punti base. Questo adeguamento dovrebbe generare risparmi annuali sugli interessi di circa $1,6 milioni, con commissioni una tantum di circa $1,0 milione.
Dal marzo 2024, lo spread tra il costo del prestito a termine di Hillman e SOFR è diminuito di 86 punti base in totale, di cui 61 punti base provengono dal riprezzamento e 25 punti base derivano dalla qualificazione per uno spread inferiore grazie al pricing basato sulla leva. L'azienda prevede di concludere il 2024 con un rapporto di leva Net Debt to Adjusted EBITDA di 2,7 volte. La direzione intende concentrarsi sul rimborso del debito, investire in opportunità di crescita redditizie e perseguire acquisizioni strategiche.
Hillman Solutions Corp. (HLMN) ha represetado con éxito su préstamo a plazo de $643 millones que vence el 14 de julio de 2028, reduciendo el margen de tasa de interés en 25 puntos básicos a SOFR + 200 puntos básicos. Se espera que este ajuste genere ahorros anuales por intereses de aproximadamente $1,6 millones, con comisiones únicas de alrededor de $1,0 millón.
Desde marzo de 2024, la diferencia entre el costo de préstamo a plazo de Hillman y SOFR ha disminuido en 86 puntos básicos en total, de los cuales 61 puntos básicos provienen del repricing y 25 puntos básicos de calificar para un spread más bajo debido al pricing basado en apalancamiento. La compañía espera concluir 2024 con un ratio de apalancamiento de Deuda Neta a EBITDA Ajustado de 2.7 veces. La dirección planea centrarse en el pago de la deuda, invertir en oportunidades de crecimiento rentables y buscar adquisiciones estratégicas.
힐맨 솔루션스 코퍼레이션 (HLMN)은 6억 4천 3백만 달러의 2028년 7월 14일 만기 기한 대출 금리를 25bp 인하하여 SOFR + 200bp로 성공적으로 재조정하였습니다. 이 조정은 연간 약 160만 달러의 이자 절감을 기대하고 있으며, 일회성 수수료는 약 100만 달러입니다.
2024년 3월 이후, 힐맨의 기한 대출 비용과 SOFR 간의 스프레드는 총 86bp 감소했으며, 여기서 61bp는 재조정으로 인한 것이고 25bp는 레버리지 기반 가격으로 인해 낮은 스프레드 자격 조건을 만족하여 발생했습니다. 회사는 2024년을 조정된 EBITDA 대비 순부채 비율이 2.7배로 마무리할 것으로 예상하고 있으며, 경영진은 부채 상환, 수익성 있는 성장 기회에 대한 투자 및 전략적 인수를 목표로 하고 있습니다.
Hillman Solutions Corp. (HLMN) a réussi à renégocier son prêt à terme de 643 millions de dollars dont l'échéance est le 14 juillet 2028, en réduisant la marge d'intérêt de 25 points de base à SOFR + 200 points de base. Cet ajustement devrait générer des économies annuelles d'intérêts d'environ 1,6 million de dollars, avec des frais uniques d'environ 1,0 million de dollars.
Depuis mars 2024, l'écart entre le coût d'emprunt des billets à terme de Hillman et SOFR a diminué au total de 86 points de base, dont 61 points de base proviennent de la renégociation et 25 points de base de la qualification pour un écart inférieur en raison d'un pricing basé sur l'effet de levier. L'entreprise prévoit de conclure 2024 avec un ratio de dette nette par rapport à l'EBITDA ajusté de 2,7 fois. La direction prévoit de se concentrer sur le remboursement de la dette, d'investir dans des opportunités de croissance rentables et de poursuivre des acquisitions stratégiques.
Hillman Solutions Corp. (HLMN) hat erfolgreich sein $643 Millionen teures Termingeld, das am 14. Juli 2028 fällig ist, umgepreist und dabei die Zinsmarge um 25 Basispunkte auf SOFR + 200 Basispunkte gesenkt. Diese Anpassung wird voraussichtlich jährliche Zinsersparnisse von etwa $1,6 Millionen mit einmaligen Gebühren von etwa $1,0 Millionen generieren.
Seit März 2024 hat sich der Spread zwischen den Kosten von Hillmans Terminkrediten und SOFR insgesamt um 86 Basispunkte verringert, wobei 61 Basispunkte auf die Umpreisung und 25 Basispunkte auf die Qualifikation für einen niedrigeren Spread aufgrund von leverage-basierten Preisen entfallen. Das Unternehmen erwartet, das Jahr 2024 mit einem Nettoverschuldungsgrad im Verhältnis zu bereinigtem EBITDA von 2,7-fach abzuschließen. Das Management plant, sich auf die Rückzahlung von Schulden, Investitionen in profitable Wachstumschancen und die Verfolgung von akquisitorischen Zukäufen zu konzentrieren.
- Annual interest savings of $1.6 million from loan repricing
- Total reduction of 86 basis points in borrowing spread since March 2024
- Expected Net Debt to Adjusted EBITDA leverage ratio of 2.7x by end of 2024
- One-time fees of $1.0 million for loan repricing
Insights
The successful term loan repricing demonstrates HLMN's improved financial position and creditworthiness. The
The projected Net Debt to Adjusted EBITDA ratio of 2.7x indicates solid deleveraging progress and improved balance sheet health. This positions HLMN favorably for future capital allocation opportunities, including debt reduction, organic growth investments and strategic M&A. Think of it like refinancing a mortgage at a better rate - while the principal remains the same, the lower interest expense frees up cash flow for other productive uses.
The timing of this repricing is strategic, as it comes ahead of potential market volatility and provides increased financial flexibility. For context, a leverage ratio below 3.0x is generally considered healthy in the industrial distribution sector, suggesting HLMN has achieved a comfortable level of financial stability.
The repricing news reveals important strategic positioning in the hardware and merchandising solutions sector. With
The hardware distribution market remains fragmented, presenting consolidation opportunities. HLMN's improved financial flexibility positions it as a potential consolidator in the space. The company's ability to secure more favorable loan terms signals lender confidence in its business model and market position. For investors, this translates to reduced financial risk and improved earnings potential, as every dollar saved on interest expenses flows directly to the bottom line.
CINCINNATI, Jan. 15, 2025 (GLOBE NEWSWIRE) -- Hillman Solutions Corp. (Nasdaq: HLMN) (the “Company” or “Hillman”), a leading provider of hardware products and merchandising solutions, successfully repriced its existing
The repricing reduces Hillman’s interest rate margin by 25 basis points to SOFR + 200 basis points, based on current leverage and elections.
The expected annualized interest savings are approximately
“Hillman’s financial strength continues to improve, giving us the opportunity to narrow the spread on our term note and lower our cost of borrowing by another 25 basis points,” commented Rocky Kraft, Hillman’s chief financial officer.
Since March of 2024, the spread between Hillman’s term note borrowing cost and SOFR has been reduced by a total of 86 basis points, of which 61 basis points were due to repricing and 25 basis points were due to qualifying for a lower spread in the leverage-based pricing applicable to the term note.
Kraft continued: “As anticipated, we expect to end 2024 with a Net Debt to Adjusted EBITDA leverage ratio of 2.7 times. We will continue to allocate capital toward repaying debt, investing in long-term profitable growth opportunities, and executing accretive tuck-in acquisitions.”
The Company will provide more information on its 2025 outlook and expectations during its fourth quarter 2024 earnings call which is expected to take place in February 2025.
About Hillman Solutions Corp.
Hillman Solutions Corp. (“Hillman”) is a leading provider of hardware-related products and solutions to home improvement, hardware, and farm and fleet retailers across North America. Renowned for its commitment to customer service, Hillman has differentiated itself with its competitive moat built on direct-to-store shipping, a dedicated in-store sales and service team of over 1,100 professionals, and over 60 years of product and industry experience. Hillman’s extensive portfolio includes hardware solutions (fasteners, screws, nuts and bolts), protective solutions (work gloves, jobsite storage and protective gear), and robotic and digital solutions (key duplication and tag engraving). Leveraging its world-class distribution network, Hillman regularly earns vendor of the year recognition from top customers. For more information on Hillman, visit www.hillman.com.
Forward Looking Statements
Statements made in this press release may be considered forward-looking statements and should not be relied upon as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," “target”, “goal”, "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company's control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) unfavorable economic conditions that may affect operations, financial condition and cash flows including spending on home renovation or construction projects, inflation, recessions, instability in the financial markets or credit markets; (2) increased supply chain costs, including raw materials, sourcing, transportation and energy; (3) the highly competitive nature of the markets that we serve; (4) the ability to continue to innovate with new products and services; (5) direct and indirect costs associated with the May 2023 ransomware attack, and our receipt of expected insurance receivables associated with that cyber security incident; (6) seasonality; (7) large customer concentration; (8) the ability to recruit and retain qualified employees; (9) the outcome of any legal proceedings that may be instituted against the Company; (10) adverse changes in currency exchange rates; or (11) regulatory changes and potential legislation that could adversely impact financial results.. The foregoing list of factors is not exclusive, and readers should also refer to those risks that are included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 30, 2023. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements.
Except as required by applicable law, the Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this communication to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
Contact
Michael Koehler
Vice President of Investor Relations & Treasury
513-826-5495
Source: Hillman Solutions Corp.
FAQ
What is the expected annual interest savings for HLMN from the January 2025 loan repricing?
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How much has HLMN reduced its term note borrowing spread since March 2024?
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