Midas amends loans to cut pricing, allow for share repurchase, reduce principal payments

By Sara Rosenberg

New York, Nov. 9 - Midas Inc. amended its credit facility, lowering the interest rate on both the revolver and the term loan by 50 basis points, removing some restrictive covenants, including one that prevented a share repurchase program, and reducing required annual principal payments to $6 million from $10 million, according to a company news release.

The term loan now carries an interest rate of Libor plus 250 basis points, and the revolver, based on current debt levels, now carries an interest rate of Libor plus 225 basis points.

At the end of the third quarter, Midas had $20.1 million outstanding on the revolver and $56.2 million outstanding on the term loan.

Also, on Tuesday, the company announced that its board of directors has authorized a share repurchase plan to begin in 2005, for up to $25 million in shares.

"The repurchase program and the amendments to our credit facility are evidence of our confidence in the company's growing financial strength as Midas continues its transformation to focus on the profitable franchise retail business," said Alan D. Feldman, president and chief executive officer, in the release. "Our capital allocation plan provides for a portion of our free cash flow to be invested in continued debt reduction and growth initiatives, with the balance returned to shareholders through this buyback program."

Midas is an Itasca, Ill., provider of automotive services.

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