Radio One gets loan forbearance agreement due to leverage ratio breach

By Sara Rosenberg

New York, July 16 - Radio One Inc. entered into a forbearance agreement to cover defaults under its existing credit facility resulting from non-compliance with the maximum total leverage ratio, according to an 8-K filed with the Securities and Exchange Commission on Friday.

Under the agreement, pricing on the facility has been increased by 200 basis points starting on July 1.

In addition, the lenders have the right to deliver "payment blockage notices" to the trustees for the holders of the company's 8 7/8% senior subordinated notes due 2011 and/or its 6 3/8% senior subordinated notes due 2013.

Also, the company can't request any borrowings or issue letters of credit during the forbearance period.

Wells Fargo is the administrative agent on the deal.

The agreement was executed on July 15 and expires on Aug. 13.

Radio One is a Lanham, Md., diversified media company.

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