Momentive may be unable to maintain compliance with leverage covenant

By Sara Rosenberg

New York, March 16 - Momentive Performance Materials Inc. warned that it may have a hard time staying in compliance with the senior secured leverage ratio under its credit facility in the future if demand remains weak and there are sufficient declines in sales and EBITDA, according to a news release.

At Dec. 31, the company was in compliance with the leverage covenant, which is set at 4.25 to 1 as of the last day of any fiscal quarter.

In addition, the company said that it drew down $90 million under its revolver on March 10 to preserve financial flexibility and access to capital in light of the current volatility of financing markets.

At the time of the draw, the company had $28.1 million of availability under its revolver and $7.1 million available under its synthetic letter-of-credit facility.

Momentive is an Albany, N.Y.-based specialty materials company, providing high-technology materials products to the silicones, quartz and ceramics markets.

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