GEO Specialty amends loan, easing covenants, changing revolver availability, collateral

By Sara Rosenberg

New York, April 15 - GEO Specialty Chemicals Inc. amended its senior credit facility, making the company's ability to draw up to the full $20 million available under its revolver dependant on compliance with a tiered senior leverage ratio requirement, adding collateral requirements provided by Charter Oak Partners and Charter Oak Capital Partners, LP to the revolver, increasing the applicable margin for the term loan by 100 basis points until March 31, 2004, and relaxing the interest coverage ratio and the senior leverage ratio covenants for the remainder of 2003 and the first quarter of 2004.

Furthermore, under the amendment, proceeds from asset sales must be applied to the scheduled term loan repayments due and owing for the next 24 months.

The additional collateral for the revolver has been provided in the form of a support agreement in favor of the senior lenders, that includes a commitment from Charter Oak to provide letters of credit or cash collateral in increments of $1 million up to the maximum amount of $10 million for extensions of credit over $5 million, according to a filing with the Securities and Exchange Commission.

Deutsche Bank Trust Co. is the administrative agent and US Bank is the documentation agent on the facility.

GEO Specialty Chemicals is a Cleveland specialty chemicals company.

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