Tower Automotive expects amendment in near future allowing for convertible debt repayment

By Sara Rosenberg

New York, June 3 - Tower Automotive Inc.'s subsidiary, R.J. Tower Corp. is in the process of finalizing an amendment to its credit facility that would allow the company to use proceeds from a high yield bond offering to refund $200 million of its convertibles due in 2004 and provide additional liquidity, a company spokesman told Prospect News on Tuesday. Bank of America and JPMorgan are the lead banks on the facility.

Under the proposed terms of the amendment, the company's $600 million revolver would be reduced to $316 million, the $125 million term loan would be increased to $240 million and there would be a $44 million permanent letter of credit facility.

The larger term loan is only being syndicated to the company's existing bank group.

Overall, the Grand Rapids, Mich. auto parts supplier would be reducing its existing $725 million credit facility to a size of $600 million, the company spokesman said.

In addition, various company assets would now secure the previously unsecured credit facility.

"The banks are considering," the spokesman said. "We expect to have it finalized by the end of this week, beginning of next week."

The company announced last week that it would be selling $250 million senior notes due 2013. JP Morgan and Banc of America Securities are joint bookrunners on the Rule 144A/Regulation S offering.

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