LodgeNet amends credit facility, deferring leverage, interest coverage covenant changes

By Sara Rosenberg

New York, Aug. 19 - LodgeNet Entertainment Corp. amended its senior credit facility, modifying leverage and interest coverage covenants by deferring Dec. 31, 2002 step-downs in the covenant terms.

"We could have operated under the conditions of the original covenants, but decided to approach our banks for modifications that will give us greater flexibility," said Scott C. Petersen, president and chief executive officer, in a news release. "Our results over the last several quarters have continued to demonstrate the fundamental strength of our business model and the quality of our operations. Despite approved changes in the leverage covenants, we will continue to exercise prudence as we evaluate growth opportunities, especially in these uncertain economic times."

"We consider this a significant vote of confidence from our lenders," said Gary H. Ritondaro, senior vice president and chief financial officer, in the release. "The successful completion of this amendment provides LodgeNet with increased financial flexibility and the resources to continue to execute on our business plan. In its amended state, this facility provides LodgeNet with more than sufficient credit availability until we reach a net positive free cash flow position anticipated by the end of 2003."

LodgeNet is a Sioux Falls, S.D. provider of television-based broadband, interactive services to the lodging industry.

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