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Commercial Vehicle Group exchanges portion of 8% notes, gets new discounted term loan, waiver
By Angela McDaniels
Tacoma, Wash., Aug. 4 - Commercial Vehicle Group, Inc. has completed a private exchange with some holders of its 8% senior notes due 2013 and obtained a new discounted second-lien term loan from the exchanging holders, according to a company news release.
The company also amended its asset-based loan and security agreement with Bank of America, NA, which agreed to waive the covenant default resulting from the company's failure to be in compliance with the minimum EBITDA requirement as of June 30.
Commercial Vehicle Group said it is now in compliance with the amended credit agreement.
Notes exchange
The noteholders agreed to exchange $52.2 million of 8% notes for units consisting of $42.1 million of new third-lien senior secured notes due February 2013 and warrants to purchase 745,000 shares of the company's common stock at an exercise price of $0.35 per share.
Interest on the new notes will be paid in-kind through Feb. 15, 2010 and may, at the company's option, be paid in-kind through Feb. 15, 2011 at an annual rate of 13%. After that, interest will be paid in cash at an annual rate of 11%.
New term loan
The company entered into a $16.8 million second-lien term loan with some of the exchanging holders for proceeds of about $13.1 million, which represents a discount of 21.9%.
The term loan is due November 2012 and accrues interest at 15%.
The proceeds from the term loan will be used to reduce borrowings under the company's credit facility and to pay related fees and expenses.
Credit facility amendment
The amendment to the asset-based credit facility includes a reduction in size of the commitment to $37.5 million from $47.5 million and provides that the company need not comply with any minimum EBITDA requirement or fixed charge coverage ratio requirement as long as it maintains at least $15 million of borrowing availability under the facility.
If borrowing availability is less than $15 million for three consecutive business days, or less than $12.5 million on any one day, the company will be required to comply with revised minimum EBITDA requirements for 2009 and a fixed charge coverage ratio for fiscal quarters ending on or after March 31, 2010. It will have to comply with these requirements until it has borrowing availability of more than $15 million for 60 consecutive days.
The indenture governing the 8% notes was not amended in connection with these transactions.
After giving effect for the transaction and as of Tuesday, the company did not have any outstanding borrowings under its credit facility, had approximately $1.7 million in letters of credit and estimated it had about $20.8 million of availability under the credit facility before triggering the requirement to comply with financial maintenance covenants.
Commercial Vehicle Group is a New Albany, Ohio-based supplier of integrated system solutions for the commercial vehicle market.
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