Axia seeks loan amendment to provide covenant relief, 50 bps pricing increase

By Sara Rosenberg

New York, June 20 - Axia Inc. is talking with lenders under its credit facility about an amendment that would revise covenants and, in return, increase pricing on the revolver and term loan by 50 basis points, according to a fund manager.

The covenants that the company is looking to modify are the leverage and interest coverage ratios.

Axia is asking for four quarters of a "covenant holiday," meaning no covenants, and then seven quarters of relief after that.

"As far as I know, that's not going to fly," the fund manager said about the four quarters of no covenants. "Comments from people on the call were that it was a non-starter. People would not even consider that."

When asked whether the increase in pricing, plus the 25 bps amendment fee that is being offered, might be enough to get lenders on board, the fund manager responded, "Given the industry they're in, no."

UBS is the lead bank on the amendment that was launched with a conference call on Monday morning.

Consents are due on June 28.

Axia is a Houston-based manufacturer of packaging and other industrial equipment and construction machinery.

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