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Long-Term Debt

9 Months Ended

Sep. 30, 2022

6. Long-Term Debt

Outstanding long-term debt consisted of the following (in thousands):


	September 30,		December 31,
	2022		2021
Term Loan Facility ⁽¹⁾	$	1,359,230	$	1,367,277
Real Estate Facilities ⁽²⁾		21,666		22,896
Other Long-Term Debt		3,311		3,400
Subtotal		1,384,207		1,393,573
Less: current portion		(15,827)		(15,822)
Total	$	1,368,380	$	1,377,751

(1)	Net of $15.2 million and $16.8 million of original issue discount at September 30, 2022 and December 31, 2021, respectively, and $6.1 million and $6.9 million of finance costs at September 30, 2022 and December 31, 2021, respectively.

(2)	Net of $0.2 million of finance costs at each of September 30, 2022 and December 31, 2021.

Senior Secured Credit Facilities

As of September 30, 2022 and December 31, 2021, CWGS Group, LLC (the “Borrower”), a wholly-owned subsidiary of CWGS, LLC, was party to a credit agreement (the “Credit Agreement”) for a senior secured credit facility (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of a $1.4 billion term loan facility (the “Term Loan Facility”) and a $65.0 million revolving credit facility (the “Revolving Credit Facility”).

The funds available under the Revolving Credit Facility may be utilized for borrowings or letters of credit; however, a maximum of $25.0 million may be allocated to such letters of credit. The Revolving Credit Facility matures in June 2026 and the Term Loan Facility matures in June 2028. The Term Loan Facility requires mandatory principal payments in equal quarterly installments of $3.5 million. Additionally, the Company is required to prepay the term loan borrowings in an aggregate amount up to 50% of excess cash flow, as defined in the Credit Agreement, for such fiscal year depending on the Total Leverage Ratio (as defined by the Credit Agreement) beginning with the year ended December 31, 2022. The Company does not expect that an additional excess cash flow payment will be required relating to 2022.

Under the Senior Secured Credit Facilities, the Company has the ability to request to increase the amount of term loans or revolving loans in an aggregate amount not to exceed the greater of (a) a “fixed” amount set at $725.0 million and (b) 100% of consolidated EBITDA for the most recent four consecutive fiscal quarters on a pro forma basis (as defined in the Credit Agreement). The lenders under the Senior Secured Credit Facilities are not under any obligation to provide commitments in respect of any such increase.

As of September 30, 2022 and December 31, 2021, the average interest rate on the Term Loan Facility was 5.34% and 3.25%, respectively. The following table details the outstanding amounts and available borrowings under the Senior Secured Credit Facilities as of (in thousands):


	September 30,		December 31,
	2022		2021
Senior Secured Credit Facilities:
Term Loan Facility:
Principal amount of borrowings	$	1,400,000	$	1,400,000
Less: cumulative principal payments		(19,515)		(9,004)
Less: unamortized original issue discount		(15,177)		(16,826)
Less: unamortized finance costs		(6,078)		(6,893)
		1,359,230		1,367,277
Less: current portion		(14,015)		(14,015)
Long-term debt, net of current portion	$	1,345,215	$	1,353,262
Revolving Credit Facility:
Total commitment	$	65,000	$	65,000
Less: outstanding letters of credit		(4,930)		(4,930)
Additional borrowing capacity	$	60,070	$	60,070

The Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries with the exception of FreedomRoads Intermediate Holdco, LLC, the direct parent of FR, and FR, and its subsidiaries. The Credit Agreement contains certain restrictive covenants pertaining to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sales of assets, investments, and the payment of dividends subject to certain limitations and minimum operating covenants. Additionally, management has determined that the Senior Secured Credit Facilities include subjective acceleration clauses, which could impact debt classification. Management believes that no events have occurred at September 30, 2022 that would trigger a subjective acceleration clause.

The Credit Agreement requires the Borrower and its subsidiaries to comply on a quarterly basis with a maximum Total Net Leverage Ratio (as defined in the Credit Agreement), which covenant is in effect only if, as of the end of each calendar quarter, the aggregate amount of borrowings under the revolving credit facility (including swingline loans), letters of credit and unreimbursed letter of credit disbursements outstanding at such time is greater than 35% of the total commitment on the Revolving Credit Facility (excluding (i) up to $15.0 million attributable to any outstanding undrawn letters of credit and (ii) any cash collateralized or backstopped letters of credit), as defined in the Credit Agreement. As of September 30, 2022, the Company was not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 35% threshold. The Company was in compliance with all applicable debt covenants at September 30, 2022 and December 31, 2021.

Real Estate Facilities

In November 2018, September 2021 and December 2021, Camping World Property, Inc. (the ‘‘Real Estate Borrower’’), an indirect wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), entered into loan and security agreements for real estate credit facilities (as amended from time to time, the “First Real Estate Facility”, the “Second Real Estate Facility”, and the “Third Real Estate Facility”, respectively, and collectively the “Real Estate Facilities”) with aggregate maximum principal capacities of $21.5 million, $9.0 million, and $10.1 million for the First Real Estate Facility, Second Real Estate Facility, and Third Real Estate Facility, respectively.

Borrowings under the Real Estate Facilities are guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC. The Real Estate Facilities may be used to finance the acquisition of real estate assets. The Real Estate Facilities are secured by a first priority security interest on the real estate assets acquired with the proceeds of the Real Estate Facilities (“Real Estate Facility Properties”). The First Real Estate Facility, Second Real Estate Facility, and Third Real Estate Facility mature in October 2023, September 2026, and December 2026, respectively.

As of September 30, 2022, the First Real Estate Facility, Second Real Estate Facility, and the Third Real Estate Facility had outstanding principal balances of $4.0 million and $8.1 million, and $9.7 million, respectively, net of unamortized finance costs, and a weighted average interest rate of 4.84%. As of September 30, 2022, the Company had no available capacity under the Real Estate Facilities, since repaid amounts cannot be reborrowed under the Real Estate Facilities.

Management has determined that the credit agreements governing the Real Estate Facilities include subjective acceleration clauses, which could impact debt classification. Management believes that no events have occurred at September 30, 2022 that would trigger a subjective acceleration clause. Additionally, the Real Estate Facilities are subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants. The Company was in compliance with all debt covenants at September 30, 2022 and December 31, 2021.

On October 27, 2022, subsidiaries of FRHP Lincolnshire, LLC (“FRHP”), an indirect wholly-owned subsidiary of CWGS, LLC, entered into a credit agreement with a syndication of banks for a real estate credit facility (the “2022 Real Estate Facility”) with aggregate maximum principal capacity of $250.0 million with an option that allows FRHP to request an additional $100.0 million of principal capacity. The lenders under the 2022 Real Estate Facility are not under any obligation to provide commitments in respect of any such increase. The 2022 Real Estate Facility bears interest at FRHP’s option of either (as defined in the credit agreement for the 2022 Real Estate Facility): (a) the Secured Overnight Financing Rate (“SOFR”) plus the applicable rate of 2.30% or (b) the highest of (i) the Federal Funds Rate plus 1.80%, (ii) the Prime Rate plus 1.30%, or (iii) SOFR plus 2.30%. The 2022 Real Estate Facility has an unused commitment fee of 0.20% of the aggregate unused principal amount and it matures in October 2027. Additionally, the 2022 Real Estate Facility is subject to a debt service coverage ratio covenant (as defined in the credit agreement for the 2022 Real Estate Facility) and management has determined that the 2022 Real Estate Facility includes subjective acceleration clauses, which could impact debt classification. All obligations under the 2022 Real Estate Facility and the guarantees of those obligations, are secured, subject to certain exceptions, by the mortgaged real property assets. No amounts were borrowed as of the closing of the 2022 Real Estate Facility and the Company expects to borrow between $100.0 million and $150.0 under the 2022 Real Estate Facility during the fourth quarter of 2022.

Other Long-Term Debt

In December 2021, FRHP Lincolnshire, LLC, an indirect wholly-owned subsidiary of CWGS, LLC, assumed a mortgage as part of a real estate acquisition. This mortgage is secured by the acquired property and is guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC. As of September 30, 2022, the outstanding principal balance of the mortgage was $3.3 million with an interest rate of 3.50%. The mortgage matures in December 2026.