Integrated Electrical gets loan forbearance agreement for covenant violation

By Sara Rosenberg

New York, Jan. 30 - Integrated Electrical Services Inc. received a forbearance agreement under its $80 million revolving credit facility regarding its failure to comply as of Jan. 26 with the fixed-charge coverage ratio for the period ending Dec. 31, according to an 8-K filed with the Securities and Exchange Commission Monday.

In addition, the company is in default with respect to the pledge of its ownership interest in EnerTech Capital Partners II LP as collateral under the facility.

Bank of America is the lead bank on the deal.

As a result of the defaults, Bank of America sent a "blockage notice" to the trustee of the company's senior subordinated notes, preventing any payments on the notes.

Under the agreement, any extensions of credit under the revolver will be at the discretion of the Bank of America.

The company currently has no outstanding borrowings under the revolver and has reimbursement obligations under letters of credit outstanding in the amount of $54.6 million as of Monday.

The forbearance agreement was obtained on Jan. 27 and is in effect through Feb. 28.

Integrated Electrical Services is a Houston-based provider of electrical services to the commercial, industrial and residential markets.

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