Horizon PCS amends credit agreement and receives waiver on non-compliance with EBITDA

By Sara Rosenberg

New York, June 27 - Horizon PCS Inc. said it amended its senior secured credit facility, modifying covenants and interest rates. Furthermore, lenders agreed to waive non-compliance with EBITDA requirements during the first quarter of 2002 through June 28, 2002, while the amendment was being negotiatied.

Wachovia Bank acted as administrative agent, Westdeutsche Landesbank Girozentrale acted as syndication agent and arranger and Fortis Capital Corp. acted as documentation agent.

Under the amendment, interest rates were changed, setting an initial spread of Libor plus 400 basis points on the term loan A, the revolver and the letter of credit fees and Libor plus 450 basis points on the term loan B, according to a filing with the Securities and Exchange Commission. Interest rates vary based on the leverage ratio (see table 1). Also changed were, consolidated EBITDA requirements (see table 2), leverage ratios (see table 3), senior leverage ratios (see table 4) and interest coverage ratios (see table 5).

The maximum amount of revolving loans for June 30, 2003 is $16 million, for Sept. 30, 2003 is $26 million, for Dec. 31, 2003 is $33 million and for March 31, 2004 is $52 million, the filing said.

Table 1: Horizon PCS' new interest rate margins

Leverage Ratio Libor for revolver, term A, LOC Libor for term B

Greater than 12.0 to 1.0 4.00% 4.50%

10.0 to 1.0 to 12.0 to 1.0 3.75% 4.50%

8.0:1.0 or higher, less than 10.0 to 1.0 3.50% 4.50%

7.0:1.0 or higher, less than 8.0 to 1.0 3.25% 4.50%

6.0:1.0 or higher, less than 7.0 to 1.0 3.00% 4.50%

5.0:1.0 or higher, less than 6.0 to 1.0 2.75% 4.50%

Less than 5.0 to 1.0 2.50% 4.50%

Table 2: Horizon PCS' new EBITDA covenant

Fiscal Quarter Ended Required Consolidated EBIDTA Benchmark Consolidated EBITDA

Sept. 30, 2000 ($13,000,000) N/A

Dec. 31, 2000 ($20,000,000) N/A

March 31, 2001 ($13,250,000) N/A

June 30, 2001 ($19,631,000) N/A

Sept. 30, 2001 ($25,135,000) N/A

Dec. 31, 2001 ($36,105,000) N/A

March 31, 2002 ($16,600,000) N/A

June 30, 2002 ($17,900,000) ($14,900,000)

Sept. 30, 2002 ($21,400,000) ($18,400,000)

Dec. 31, 2002 ($22,600,000) ($19,600,000)

March 31, 2003 ($9,200,000) ($6,200,000)

June 30, 2003 ($7,200,000) ($4,200,000)

Sept. 30, 2003 ($8,300,000) ($5,300,000)

Dec. 31, 2003 ($11,300,000) ($8,300,000)

March 31, 2004 $8,600,000 $12,600,000

Table 3: Horizon PCS' new leverage covenants

Period Ratio

June 30, 2004 to Dec. 31, 2004 14.50 to 1.0

March 31, 2005 13.50 to 1.0

June 30, 2005 to Sept. 30, 2005 9.00 to 1.0

Dec. 31, 2005 to March 31, 2006 6.25 to 1.0

June 30, 2006 to Sept. 30, 2006 5.25 to 1.0

Dec. 31, 2006 to March 31, 2007 4.25 to 1.0

June 30, 2007 and after 3.50 to 1.0

Table 4: Horizon PCS' new senior leverage covenants

Period Senior Leverage Ratio

June 30, 2004 to March 31, 2005 3.75 to 1.0

June 30, 2005 to Sept. 30, 2005 3.00 to 1.0

Dec. 31, 2005 to March 31, 2006 2.50 to 1.0

June 30, 2006 and after 2.00 to 1.0

Table 5: Horizon PCS' new interest coverage covenant

Period Interest Coverage Ratio

June 30, 2004 to Dec. 31, 2004 1.00 to 1.0

March 31, 2005 1.25 to 1.0

June 30, 2005 to March 31, 2006 1.50 to 1.0

June 30, 2006 to March 31, 2007 1.75 to 1.0

June 30, 2007 to March 31, 2008 2.25 to 1.0

June 30, 2008 and after 2.75 to 1.0

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