Omnova amends loan to extend maturity, reduce rates

By Sara Rosenberg

New York, May 23 - Omnova Solutions Inc. amended its $100 million asset-based credit facility, extending the tenor to November 2009 and reducing interest rates on the facility, according to an 8-K filed Monday with the Securities and Exchange Commission.

The interest rate is now set at Libor plus 250 basis points if the fixed-charge coverage ratio is less than 1.25, Libor plus 225 bps if the fixed-charge coverage ratio is greater than 1.25 but less than 1.50, Libor plus 200 bps if the fixed-charge coverage ratio is greater than 1.50 but less than 1.75, Libor plus 175 bps if the fixed-charge coverage ratio is greater than 1.75 but less than 2.00, and Libor plus 150 bps if the fixed-charge coverage ratio is greater than 2.00.

Under the amended agreement, the company will have increased flexibility for investment and refinancing opportunities, a news release stated.

At the end of April, the company had $37.5 million outstanding under the facility.

The amendment is effective as of May 18.

"We're very pleased by the confidence our lenders have in Omnova Solutions by extending this credit agreement through 2009 with more attractive terms and flexibility as well as liquidity to operate our business," said Kevin McMullen, chairman and chief executive officer, in the release.

Omnova is a Fairlawn, Ohio-based specialty chemical company.

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