Directed Electronics amends loan, modifying covenants and pricing, downsizing revolver

By Sara Rosenberg

New York, March 17 - Directed Electronics Inc. amended its credit facility, revising the total leverage ratio and the fixed-charge coverage ratio, increasing pricing, and downsizing the revolver to $60 million from $100 million, according to an 8-K filed with the Securities and Exchange Commission Monday.

The maximum consolidated total leverage ratio was increased to 5.25 times through March 31, 2009, stepping down to 4.95 times through Dec. 31, 2009, with step-downs thereafter consistent with the previous terms of the company's credit agreement.

The minimum fixed-charge coverage ratio was reduced beginning Oct. 1, 2009.

Pricing on the credit facility is Libor plus 350 basis points if leverage is less than 4.5 to 1.0, and Libor plus 400 bps if leverage is equal to or greater than 4.5 to 1.0. Prior to the amendment, pricing was Libor plus 250 bps.

Of the total revolver amount, $50 million is available all year and an additional $10 million is available from October through February.

In addition, the amendment provides the company with the right to execute the sale of certain accounts receivable so long as the proceeds are used to reduce debt.

And, the term loan quarterly payments were changed to about $670,000 in March, about $5.9 million due on Dec. 31, 2009 and about $11.1 million due on Dec. 31, 2010, 2011, and 2012, with the final installment of the total principal due on Sept. 22, 2013.

The amendment was effective March 11.

CIBC is the administrative agent on the deal.

Directed Electronics is a Vista, Calif.-based designer and marketer of vehicle security and convenience, home audio, mobile audio and video, and satellite radio products.

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