Heating Finance makes loan principal repayments that were in question

By Angela McDaniels

Tacoma, Wash., July 1 - Heating Finance plc has made the £20.72 million and €1.60 million principal repayments on its credit facility that were due Saturday, according to a company news release.

Parent company Baxi Holdings Ltd. warned on June 12 that the principal repayments might not be made if discussions to combine with the Dietrich Remaha Group did not lead to a transaction agreement by the scheduled payment date.

On the same day, Heating Finance said it might be in breach of its cash flow cover and leverage covenants when those covenants were next tested. The test date was Tuesday.

Heating Finance's lenders provided a standstill agreement and a waiver of any breach of the leverage covenants. Both are good through Aug. 31.

In addition, holders of the company's £94.36 million of 7.875% mezzanine notes due 2014 agreed to a waiver of any cross default.

Heating Finance is a heating products company based in Derby, England.

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