VENTURA, Calif. -- On Dec. 15, Affinity Group, Inc., entered into a non-binding letter of intent with a private equity firm to provide $70 million in senior secured second lien debt to AGI and award the private equity firm a future economic interest in Affinity Group Holding Inc., according to information filed with the Securities Exchange Commission.
The private equity firm was not named in the Affinity Group filing.

Consummation of the financing and other aspects of the proposed transaction are subject to a number of conditions, including completion of due diligence by the private equity firm, completion of definitive documentation acceptable to AGI and the private equity firm, and refinancing of AGI’s senior secured facility.

As of Sept. 30, 2009, AGI had $120.2 million outstanding under the term loans and revolving credit line under its current senior secured credit facility due March 31, 2010, $9.7 million outstanding on its second lien loan indebtedness which is due July 31, 2010 and $137.8 million outstanding under AGI’s senior subordinated notes due Feb. 15, 2012. In addition, Affinity Group Holding, Inc. had $112.1 million outstanding under AGHI’s senior notes due Feb. 15, 2012.

If conditions to the proposed $70 million second lien financing are satisfied, Affinity Group anticipates closing on such financing prior to the maturity of the senior secured credit facility due March 31, 2010.

Affinity Group, Inc., a wholly-owned subsidiary of Affinity Group Holding, Inc. entered into an option agreement June 5 with The Stephen Adams Living Trust  in connection with support provided by the trust with respect to the June 5, 2009 amendment to AGI’s senior credit agreement.

The trust has assigned its rights under the option agreement to FreedomRoads Holding Company, LLC (“FreedomRoads”). Effective Dec. 14, 2009 AGI and Freedom Roads mutually agreed to terminate the option agreement. In connection therewith, Affinity Group and FreedomRoads also amended the cooperative resources agreement between AGI and Freedom Roads to eliminate certain fees payable by FreedomRoads, entered into a 10-year parts and accessories supply contract and entered into a database licensing agreement.

SOURCE: Securities Exchange Commission filing