Lear gets commitment for $300 million term loan

By Sara Rosenberg

New York, Aug. 1 - Lear Corp. obtained a commitment from two of its existing lenders for a $300 million 18-month term loan that would be used to create additional excess liquidity, according to an 8-K filed with the Securities and Exchange Commission Monday.

The company needs the extra liquidity because of the payoff at maturity of its $600 million of 7.96% senior notes in May, reduced operating cash flows and cash charges associated with its restructuring actions.

The term loan is expected to close in the third quarter.

In addition, Lear is looking to amend its existing $1.7 billion credit facility to allow for the new term loan, to provide for the pledge of the capital stock of certain material subsidiaries as security for the existing facility as well as for the new term loan and to adjust the leverage ratio covenant for the third quarter through the first quarter of 2006 to give the company greater flexibility.

Lear is a Southfield, Mich.-based designer and manufacturer of interior systems and components for automobiles and light trucks worldwide.

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