K2 amends loan to permit convertibles issuance

By Sara Rosenberg

New York, June 5 - K2 Inc. amended its $205 million revolving credit facility to allow for the issuance of $75 million 5% senior convertible notes due June 2010, according to a filing with the Securities and Exchange Commission.

Basically, the amendment permits the company to incur additional indebtedness as long as the ratio of consolidated EBITDA to consolidated interest expense is greater than 2.25 to 1.00.

In return for the amendment, the company will pay a supplemental unused commitment fee of up to 50 basis points depending on the actual amount outstanding under the revolver through June 1, 2004. If there is more than or equal to $75 million outstanding then the fee is zero. If there is less then $75 million outstanding but more than or equal to $45 million outstanding then the fee is 25 basis points. And, if there is less than $45 million outstanding then the fee is 50 basis points, according to the filing.

Furthermore, there is a nominal amendment fee.

Bank One is the lead bank on the revolver.

K2 is a Los Angeles consumer products company with a primary focus on sporting goods and other recreational products.

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