RHI Entertainment gets forbearance of credit facility defaults

By Sara Rosenberg

New York, Dec. 24 - RHI Entertainment Inc. obtained a forbearance agreement under its credit facility regarding existing defaults, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

The defaults covered include non-compliance with the mandatory prepayment covenant, failure to pay settlement amounts payable upon the termination of swaps and modifications of contracts with a customer.

During the forbearance period, the company may not borrow additional loans and pricing is increased by 200 basis points.

Also, certain covenants, such as those related to investments, restricted payments, permitted liens, asset sales, subsidiary guarantors, control agreements, and cash expenditures and distributions, will become more restrictive.

The forbearance was entered into on Dec. 23 and is in effect until Jan. 22, 2010.

JPMorgan is the administrative agent on the deal.

RHI has engaged Rothschild Inc. as a financial advisor and has broadened discussions with its lenders about a restructuring of its debt and capital structure.

The talks with lenders could result in a prepackaged or pre-negotiated bankruptcy filing or the sale of some or all of the company's assets.

RHI is a New York-based developer, producer and distributor of new made-for-television movies, miniseries and other television programming.

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