Huffy seeks second amendment to $50 million DIP agreement

By Caroline Salls

Pittsburgh, June 15 - Huffy Corp. asked for court approval of the second amendment to its $50 million debtor-in-possession financing agreement, enhancing the cash flow and increasing cash flow availability, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of Ohio.

Specifically, the amendment:

*Reduces the special availability reserve to $2.5 million from $5.2 million, thereby increasing liquidity by $2.7 million;

*Extends the maturity date to Nov. 30, 2005 from Sept. 30, 2005;

*Creates a tiered interest rate structure that, depending on the levels of excess availability, may increase or decrease the interest rate by 25 basis points from the current rates; and

*Changes a covenant that Huffy continues to receive the support of its suppliers to a periodic affirmation from previously a numerical computation of amounts paid to suppliers.

Under the tiered rate structure, if excess availability is $7.5 million or greater, the rate will be Libor plus 225 basis points; if excess availability is between $2.5 million and $7.5 million, the rate will be Libor plus 275 bps; and if excess availability is less than $2.5 million, the rate will be Libor plus 300 bps.

Huffy will be required to pay a $100,000 amendment fee to lender Wachovia Capital Finance Corp.

Huffy, a Miamisburg, Ohio-based bicycle and sporting goods company, filed for bankruptcy Oct. 20, 2004. Its Chapter 11 case number is 04-39148.

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