Dolan eases leverage covenant ratios via U.S. Bank, adds pricing tiers

By Susanna Moon

Chicago, Oct. 10 - Dolan Co. amended its credit agreement on Oct. 5 to relax its financial covenant ratios with U.S. Bank NA as bookrunner and administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also makes the following changes:

• Relaxes the company's financial covenant ratios;

• Permits the issuance of up to $75 million of subordinated or convertible debt;

• Accelerates and increases the conversion of a portion of the revolving credit facility to a term loan so that $100 million converted on Oct. 5. Before the changes, $50 million had been scheduled to convert in December;

• Adds a provision requiring the company, beginning at the end of the fiscal year 2013, to prepay the term loans in an amount equal to 50% of excess cash flow if the company's total cash flow leverage ratio is 3 times or higher; and

• Reduces the amount the company may spend to acquire other businesses without the consent of the required lenders.

Pricing is now Libor plus 200 basis points to 550 bps, based on leverage. The amendment also adds three new pricing levels that correspond to the higher levels of the total cash flow leverage ratio permitted by the changes.

U.S. Bank is also a lender, letter-of-credit issuer and swingline lender. Wells Fargo Bank, NA is a lender and syndication agent.

Dolan is a Minneapolis-based provider of business information and professional services to the legal, financial and real estate sectors.

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