LAKE FOREST, Ill. — Brunswick Corporation and GE Commercial Distribution Finance Corporation have entered into an asset-based loan facility, secured by the domestic accounts receivable of Mercury Marine, Brunswick reported Thursday.
The facility replaces Brunswick’s existing accounts receivable sale program, the company said, pursuant to which Brunswick sold the domestic Mercury Marine receivables to Brunswick Acceptance Company, a joint venture between Brunswick Financial Services Corporation and CDF Ventures, LLC, a subsidiary of GE Capital Corporation.
The new facility totals $100 million and includes provisions to increase the size to $120 million to accommodate seasonal fluctuations in receivable balances, according to Brunswick. On May 29, 2009, the amount outstanding on the ABL facility was $81 million.
"Borrowings under the ABL facility will be reported as short-term debt on Brunswick’s consolidated balance sheets, with borrowing costs reflected in interest expense," the company reported. "The previous program was structured as a sale of receivables, and consequently, no debt was reflected on the Company’s balance sheet. The cost of the previous program was reflected in 'other income and expense' as a discount on the sale of receivables. The overall cost of the ABL facility is modestly higher than the previous receivable sale program, and reflects the current lending environment."
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