Home Interiors & Gifts in talks to amend credit facility covenants

By Ted A. Knutson

Washington, Nov. 15 - Home Interiors & Gifts Inc. said it is in talks with its bank lenders to amend or waive the covenants in its $370 million credit facility.

The Carrollton, Tex.-based home accessories marketer said by Dec. 31 declining sales could mean that it may not be able to meet financial ratio and test covenants, according to a 10-Q filing with the Securities and Exchange Commission Monday .

Home Interiors added it is in discussions with its agent bank to modify or waive the covenants that appear at risk, but gave no assurances lenders would agree to the changes. JPMorgan Chase Bank is the administrative agent. Bear Stearns Corporate Lending Inc. is the syndication agent for the facility.

The loan package is composed of $320 million in term loans and a $50 million revolver.

The company blamed weak sales on rising gas prices and hurricane-related weather. The firm also said there are adjustments that need to be made in its direct sales program.

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