Milacron amends $335 million revolver

By Sara Rosenberg

New York, March 14 - Milacron Inc. announced Thursday it amended its $335 million revolving credit facility. Deutsche Bank's Bankers Trust Co. is the lead arranger and administrative agent and PNC Bank is the documentation agent for the facility.

The new amendment will increase interest rates to Libor plus 350 basis points from Libor plus 300 basis points. According to a company press release, this will raise interest expenses by approximately $400,000 per quarter before tax. However, in return for these higher rates, the lenders have agreed to relax some required financial ratios, improving the company's flexibility to finish its restructuring of operations.

Under the amendment, the covenant for consolidated total indebtedness to consolidated EBITDA ratio was adjusted (see Table 1). Also, limits on cumulative capital expenditure amounts made by the company and its subsidiaries were reset (see Table 2). Lastly, the minimum cumulative consolidated EBITDA amounts were modified (see Table 3).

"As a result of the many aggressive actions initiated and carried out last year, we entered this year with $110 million in cash," said Ronald D. Brown, Milacron's chairman, president and chief executive officer, in a press release. "In 2002, we continue to emphasize cash flow through improved operating efficiency, reduced working capital requirements, and curtailed capital spending. Consequently, during the course of the year we expect to pay down a portion of our revolver and reduce our overall debt levels as well."

The company incurred an amendment fee of 50 basis points.

Milacron doesn't foresee the need to borrow more than what the revolver contains, but if need be the company has more than $50 million available for borrowing in additional lines of credit.

Table 1: New debt to EBITDA covenant

Period Ratio

July 1, 2002 - Sept. 30, 2002 13.30 to 1.00

Oct. 1, 2002 - Dec. 31,2002 7.60 to 1.00

Each fiscal quarter ending on or after Jan. 1, 2003 3.50 to 1.00

Table 2: New capital expenditure limits

Fiscal Quarter Ending Maximum Cumulative Capital Expenditures

March 31, 2002 $10 million

June 30, 2002 $17 million

Sept. 30, 2002 $25 million

Dec. 31, 2002 $30 million

Table 3: New EBITDA requirement

Fiscal Quarter Ending Minimum Cumulative Consolidated EBITDA

March 31, 2002 $1 million

June 30, 2002 $10 million

September 30, 2002 $33.4 million

December 31, 2002 $62.5 million

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