Multimedia Games subsidiaries amend loan to lower it to $125 million

By Angela McDaniels

Tacoma, Wash., July 23 - Multimedia Games, Inc. subsidiaries MGAM Systems, Inc. and MegaBingo, Inc. amended their credit agreement with Comerica Bank on Wednesday, reducing the total borrowing capacity to $125 million from $150 million.

Under the amendments, some items will be added back to the calculation of consolidated EBITDA for the purpose of evaluating compliance with the credit facility's covenants.

Specifically, the calculation of consolidated EBITDA will now include legal costs and settlement fees incurred in the trailing four-quarter period related to litigation with Diamond Game Enterprises, Inc., which was settled on May 1; all non-cash stock-based compensation expenses; and up to $10 million, in total, of additional non-cash asset impairment charges that the company may incur in future periods.

The companies also agreed to a Libor floor of 2% that will add about 1.7% to the cost of borrowing based on the current one-month Libor rate, according to a company news release.

The companies will pay a one-time fee of 25 basis points and other customary fees.

Outstanding borrowings under the credit facility totaled about $83.4 million as of June 30, compared with outstanding borrowings of about $97.5 million as of March 31.

The amendments give the company added financial flexibility to pursue its strategic growth initiatives, chief financial officer Adam Chibib said in the release.

Multimedia makes systems, content and electronic gaming units for casinos and other gaming establishments. It is based in Austin, Texas.

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