Rural/Metro amends loan, waiving filing delay defaults, gaining covenant relief, upping spreads

By Sara Rosenberg

New York, Oct. 17 - Rural/Metro Corp. amended its senior secured credit facility, waiving any defaults relating to a delay in filing its 2007 10-K, providing for covenant relief and increasing pricing, according to a company news release.

The filing of the company's 10-K has been delayed as a result of a restatement relating to financial reporting for several items, including income taxes, a retirement plan match, operating leases and subscription revenue.

The covenants under which the company got relief in order to provide additional operational flexibility include the total leverage ratio, interest expense coverage ratio and fixed-charge ratio.

Pricing on the company's $83 million term loan B and $45 million letter-of-credit facility was increased to Libor plus 350 basis points from Libor plus 225 bps, and 101 soft call protection for one year against repricings was added to the tranches.

Rural/Metro's credit facility also includes a $20 million revolver.

In addition, under the amendment, the company obtained consent to the sale of real property due to favorable market conditions for commercial properties, on the basis that 100% of net proceeds will be used to repay its term loan B.

The company paid an amendment and waiver fee of $733,000 to its lenders.

The amendment and waiver are effective as of Sept. 1.

Rural/Metro is a Scottsdale, Ariz.-based provider of emergency and non-emergency medical transportation, private fire protection and other safety services.

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