Daseke Inc (DSKE)

[Enterprising Investor]

Daseke Announces Term Loan Refinancing and Credit Rating Upgrades (3/10/21)

New Covenant-lite Term Loan Extends Maturity to 2028 and Reduces Annual Cash Interest

Moody’s and S&P Global Upgrade Daseke’s Rating to “B2” and “B”, respectively

ADDISON, Texas, March 10, 2021 (GLOBE NEWSWIRE) -- Daseke, Inc. (NASDAQ: DSKE) (“Daseke” or the “Company”), the largest flatbed, specialized transportation and logistics solutions company in North America, announced today that it has refinanced its existing $484 million Term Loan B due February 2024 with a new $400 million Term Loan B and available cash. The new Term Loan B, maturing in March 2028 has a floating interest rate of LIBOR + 400 basis points, which is reduced from LIBOR + 500 basis points (the LIBOR floor was also reduced from 100 basis points to 75 basis points). The transaction closed on March 9, 2021. In addition, the Company will seek an amendment to its ABL credit agreement to increase maximum commitments thereunder from $100 million to $150 million, with a $50 million uncommitted accordion.

Transaction Highlights:

Company to utilize $84 million of its $176 million cash and cash equivalents balance as of December 31, 2020 to pay down debt, which was driven by excess cash generated from operations over the course of the previous year

Significantly reduced cash interest expense under new Term Loan

Extends maturity on the Company’s debt from 2024 to 2028

Creates additional financial flexibility through improved covenant-lite structure

Further strengthens the balance sheet and provides capacity for organic and strategic growth investments

Upon close, the Company’s estimated net debt leverage ratio as defined by its credit agreement will be approximately 2.7x based on the terms of the credit agreement

“We are pleased with the improved terms of the new Term Loan B, which were supported by the Company’s improved economic performance and unique competitive positioning,” commented Jason Bates, Chief Financial Officer of Daseke. “Execution against our strategic plan over the last six quarters has significantly enhanced our operational and financial performance, and helped us fortify our balance sheet and meaningfully improve credit metrics. Given the attractive market backdrop, we believe now was the opportune time to utilize our strong cash position to reduce the Company’s funded leverage. Additionally, Daseke’s strengthening credit profile has been recognized by ratings agencies, and the completion of this refinancing further extends our financial flexibility, particularly given the improved pricing and covenant-lite structure. The better cost of debt capital and greater financial flexibility under the new Term Loan will help serve strategic needs and the pursuit of accretive growth opportunities. We remain committed to further advancing our business transformation and driving sustainable top-line and profitability growth.”

In connection with the refinancing, on February 23, 2021, Moody’s Investment Services (“Moody’s”) upgraded Daseke’s corporate family and senior secured ratings to “B2” from “B3,” and S&P Global (“S&P”) provided a one-notch upgrade Daseke’s issuer credit family and term loan ratings to “B”.

JPMorgan Chase Bank, N.A. served as exclusive arranger and sole bookrunner for Daseke in executing this transaction.

About Daseke, Inc.

Daseke, Inc. is the largest flatbed and specialized transportation and logistics company in North America. Daseke offers comprehensive, best-in-class services to many of the world’s most respected industrial shippers through experienced people, a fleet of more than 5,000 tractors and 11,500 flatbed and specialized trailers. For more information, please visit www.daseke.com.

https://www.globenewswire.com/news-release/2021/03/10/2190371/0/en/Daseke-Announces-Term-Loan-Refinancing-and-Credit-Rating-Upgrades.html