Greyhound amends revolver, extending term and changing covenants and interest rates

By Sara Rosenberg

New York, July 8 - Greyhound Lines Inc. amended its $125 million revolving credit facility, extending the maturity date by two years to Oct. 24, 2006 with a one-year extension option, resetting some financial covenants, changing interest rates and providing for a prepayment premium should the revolver be cancelled before maturity.

Borrowings will be available at a rate of Libor plus 237.5 to 425 basis points depending on leverage (see table 1) after the quarter ending Sept. 30, according to an 8-K filed with the Securities and Exchange Commission on Thursday. Borrowings remain available at Libor plus 350 basis points before Sept. 30.

The company must maintain a minimum cash flow to interest expense ratio (see table 2), maximum debt to cash flow ratio (see table 3) and minimum cash flow (see table 4) at levels that are the same as, or more restrictive than, previous levels, according to the filing.

If the company terminates the revolver before Oct. 25, 2005, it will pay a 1% prepayment premium. If the company terminates the revolver after Oct. 25, 2005 but before Oct. 23, 2006, it will pay a 0.5% prepayment premium.

Wells Fargo Foothill is the agent bank on the deal.

The amendment became effective on July 6.

Greyhound is a Dallas-based bus company.

Table 1: Libor rate

Leverage Ratio Libor margin

Less than or equal to 2.50:1.00 2.375%

Greater than 2.50:1.00 but less than or equal to 2.75:1.00 2.75%

Greater than 2.75:1.00 but less than or equal to 3.00:1.00 3.125%

Greater than 3.00:1.00 but less than or equal to 3.25:1.00 3.50%

Greater than 3.25:1.00 but less than or equal to 3.50:1.00 3.875%

Greater than 3.50:1.00 4.25%

Table 2: Minimum consolidated interest coverage ratio

Fiscal quarter ending Minimum ratio

June 30 2.00:1.00

Sept. 30 2.00:1.00

Dec. 31 2.00:1.00

March 31, 2005 2.59:1.00

June 30, 2005 2.68:1.00

Sept. 30, 2005 2.80:1.00

Dec. 31, 2005 3.00:1.00

March 31, 2006 3.19:1.00

Table 3: Leverage ratio

Fiscal quarter ending Maximum ratio

June 30 4.75:1.00

Sept. 30 4.75:1.00

Dec. 31 4.75:1.00

March 31, 2005 3.89:1.00

June 30, 2005 3.91:1.00

Sept. 30, 2005 3.38:1.00

Dec. 31, 2005 3.20:1.00

March 31, 2006 3.44:1.00

Table 4: Minimum consolidated cash flow

Fiscal quarter ending Minimum cash flow

June 30 $7 million

Sept. 30 $59,224,000

Dec. 31 $62,543,000

March 31, 2005 $67,522,000

June 30, 2005 $70,268,000

Sept. 30, 2005 $73,245,000

Dec. 31, 2005 $78,605,000

March 31, 2006 $83,424,000

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