Associated Materials amends some covenants under revolving agreement

By Wendy Van Sickle

Columbus, Ohio, Feb. 25 – Associated Materials, LLC relaxed the cash dominion period provisions of and made some other changes to its revolving credit facility via an amendment to its April 18, 2013 credit agreement, according to an 8-K filing with the Securities and Exchange Commission.

UBS AG, Stamford Branch is U.S. administrative agent of the credit agreement, and UBS AG, Canada Branch is Canadian administrative agent.

Under the Feb. 19 amendment, a cash dominion period will commence, only

• For the period through April 21, if excess availability is less than $10 million for five consecutive business days or an event of default has occurred and is continuing. The fixed charge coverage ratio will be tested only if excess availability drops below $10 million for five straight business days;

• For April 22 through May 19, if excess availability is less than $7.5 million for five consecutive business days or an event of default has occurred and is continuing. The fixed charge coverage ratio will be tested only if excess availability drops below $7.5 million for five straight business days; and

• For May 20 through June 3, if excess availability is less than $10 million for five consecutive business days or an event of default has occurred and is continuing. The fixed charge coverage ratio will be tested only if excess availability drops below $10 million for five straight business days.

The amendment also includes a provision that reduces excess availability in certain circumstances by adding an availability block.

The availability block is $10 million through April 21. It then decreases to $7.5 million through May 19, after which it reverts to $10 million through the credit agreement’s maturity.

Concurrently with the credit agreement amendment, Associated Materials entered into a $27.5 million first-lien promissory note with interest at Libor plus 425 basis points and a 1% Libor floor. The promissory note matures on the earlier of June 18, 2018 or 30 days prior to the maturity of the company’s 9 1/8% senior secured notes due 2017.

If all or part of the promissory note is repaid during the life of the credit agreement, the availability block under the credit agreement will increase to $20 million.

Associated Materials manufactures and distributes exterior residential building products and is based in Cuyahoga Falls, Ohio.

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