O'Charley's amends revolver, changing size, pricing and covenants

By Sara Rosenberg

New York, Dec. 5 - O'Charley's Inc. amended its revolving credit facility, reducing the size, revising pricing and modifying covenants, according to a news release.

Under the amendment, the revolver was downsized to $90 million from $100 million, and will be further reduced to $65 million by the end of the first quarter of 2010.

Pricing on the revolver was increased to Libor plus 300 basis points with a 62.5 bps unused fee from Libor plus 75 bps with a 25 bps unused fee.

As for covenants, the maximum adjusted leverage ratio was increased to 5.25 from 4.75 through the end of the current fiscal year, and 5.50 thereafter.

In addition, the minimum fixed-charge ratio was reduced to 1.25 from 1.30.

Also, the maximum senior leverage ratio was reduced to 1.25 from 2.0.

Lastly, the definitions of EBITDA and EBITDAR were changed to add back non-cash compensation charges.

Wachovia Bank is the administrative agent on the deal.

"Although we currently project that we will remain in compliance with the covenants in our existing facility, given current conditions in the general economy and the casual dining industry, and the resulting uncertainty about future performance, we felt it prudent to ensure that we maintained our financial flexibility," said Gregory L. Burns, chairman and chief executive officer, in the release.

"We believe that the new bank amendment provides this flexibility for the foreseeable future. Given our estimated capital expenditures of between $15 million and $20 million for 2009, we expect to substantially reduce or completely pay off our revolver borrowings by the end of 2009," Burns added in the release.

O'Charley's is a Nashville, Tenn.-based casual-dining restaurant company.

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