Hill International forbearance agreement period pushed out to Oct. 17

By Toni Weeks

San Diego, Oct. 7 - Hill International, Inc. again amended its forbearance agreement with Bank of America, NA as administrative agent and its credit agreement lenders in connection with financial covenant violation defaults, according to an 8-K filed on Oct. 6 with the Securities and Exchange Commission.

Under the second amendment to the June 30 forbearance agreement, lenders Bank of America, Capital One, NA, PrivateBank and Trust Co. and PNC Bank, NA have agreed to forbear from enforcing their remedies against the company with respect to Hill's previously disclosed violations from Feb. 4, 2011 through the earlier of Oct. 17 and the date of the occurrence of any default or event of default other than those previously disclosed.

Under the terms of the original forbearance agreement, the lenders could have acted on the defaults after Sept. 30. A first amendment to the forbearance agreement, which amended the pricing and availability of approved letters of credit during the forbearance period, took effect Aug. 16. The original forbearance agreement took effect June 30.

Hill is negotiating with the lenders to extend the term of the forbearance agreement and expects to finalize those negotiations by Oct. 16, the 8-K said.

As previously reported, the company violated consolidated leverage ratio and consolidated fixed-charge ratio covenants under the credit agreement.

During the forbearance period, outstanding borrowings will be limited to $80 million and will bear interest at a fluctuating rate equal to the sum of the highest of the Federal Funds rate plus 50 basis points, the Bank of America prime rate or the Eurodollar rate plus 100 bps, all plus 300 bps.

In addition, the company will not be permitted to request any Eurodollar rate loans during the forbearance period, and, upon maturity, each Eurodollar rate loan outstanding at June 30 will either be repaid in full or converted to a Base rate loan.

Also, Hill cannot make acquisitions, pay dividends or repurchase its common stock without the consent of the lenders.

Hill International is a Marlton, N.J.-based provider of fee-based project management and construction claims services.

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