Link Media Outdoor, the out of home subsidiary of Boston Omaha has added $40 million in credit facilities with First National Bank of Omaha to assist with the company’s growth.  Link has borrowed $18.6 million on the facility.  Here’s a summary of the terms.

Term Loan 1

• Availability of $24.9 million
• Fixed interest rate of 4.25%
• Interest only for a year followed by a 15-25 year amortization with a maturity August 1, 2026.

Term Loan 2

• Availability equal to 3 times 2019 cashflow (EBIDTA) less any outstandings on Term Loan 1.
• Fixed rate of 7 year treasuries plus 1.95% with a floor at 4.20%.
• A 15-25 year amortization schedule with a maturity August 1, 2026.

Revolving Line of Credit

• $5 million.
• 30 day LIBOR plus 2.0-2.5%, depending on Link’s Deb t/Cashflow ratio.

Financial Covenants for all facilities.

• Debt/Cashflow (maximum) of 3.5, declining to 3.25 effective with the fiscal quarter ended December 31, 2020 and 3.00 effective with the quarter ending December 31, 2021.
• Minimum quarterly EBIDTA of $2 million.
• Minimum fixed charge coverage ratio (Cashflow/Debt service) of 1.15 to 1.00 commencing December 31, 2019.

Insider’s take:  Reasonable use of debt.  Link’s Debt/Cashflow limit is 3.25, well below the 5-6 range which Insider thinks is sustainable for an out of home company.

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