Directed Electronics to cut loan pricing, waive proceeds requirement

By Sara Rosenberg

New York, Dec. 6 - Directed Electronics Inc. plans to lower pricing on its credit facility and amend the use of proceeds provision in the agreement for its initial public offering, according to an S-1/A filed with the Securities and Exchange Commission.

Currently, the credit facility carries an interest rate of Libor plus 325 basis points. At Sept. 30, there was $166.6 million outstanding under the company's term loan and, at Nov. 30, there was $11.9 million outstanding under its $50 million revolver.

Under the existing credit agreement, the company is required to use 50% of the net proceeds from the IPO to repay bank debt. However, it is hoping to waive this requirement so that it can use proceeds to repay $37 million of senior subordinated notes that bear interest at Libor plus 800 bps and $37 million of junior subordinated notes that bear interest at 12%.

Wachovia Bank is the administrative agent on the credit facility.

Directed Electronics is a Vista, Calif., vehicle security, remote start and car audio manufacturer.

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