Funko, Inc. amended its credit agreement dated September 17, 2021, extending the maturity of the loans from September 17, 2026 to December 31, 2027. The amendment also revises pricing terms, raising the applicable margin to 450 basis points and removing the 10‑basis‑point SOFR credit‑spread adjustment, while maintaining the existing loan limits and covenants.
The extension comes amid a backdrop of significant debt—$312.24 million— and a current ratio of 0.66, which has prompted a “substantial doubt” going‑concern warning in an August 2025 filing. The new agreement waives and modifies several covenants, including minimum fixed‑charge coverage and maximum net‑leverage ratios for multiple quarters in 2025 and 2026, and introduces a minimum EBITDA covenant for the six‑month period ending June 30 2026. These changes provide Funko with relief from covenant pressure while extending its debt‑repayment horizon.
The higher margin increases interest expense, but the removal of the SOFR spread offsets a portion of that cost. The net effect is a modest rise in financing costs that is deemed acceptable in exchange for the extended maturity and covenant flexibility, giving the company a clearer path to service its debt while pursuing growth initiatives.
Strategically, the amendment gives Funko additional time to execute its “Make Culture Pop!” plan, which includes expanding into Asia and Latin America, strengthening direct‑to‑consumer channels, and leveraging its extensive licensing portfolio. The timing of the announcement—coinciding with the Toy Fair season—highlights the company’s intent to capitalize on the industry’s peak buying period.
CFO Yves Le Pendeven said, “This agreement provides us with additional financial strength and flexibility and, importantly, time for our growth initiatives to take hold and gain traction. We’re thrilled to continue building on the positive momentum we’ve generated with our partners and retailers during this year’s Toy Fair season.”
The market’s reaction to the announcement has not been reported, but the combination of covenant relief and extended maturity is expected to provide investors with a clearer view of Funko’s liquidity position and strategic execution window.
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