Texas Industries amends loan, changing covenants and pricing

By Sara Rosenberg

New York, Nov. 24 - Texas Industries Inc. amended its credit facility, revising the leverage ratio (see table) and modifying pricing, according to an 8-K filed with the Securities and Exchange Commission on Monday.

Pricing on the facility was changed to a range of Libor plus 250 basis points to 350 bps and the commitment fee can now range from 25 bps to 75 bps, based on leverage.

The amendment also added a financial covenant to require the company not to permit the ratio of the principal amount outstanding under the credit facility plus unreimbursed amounts drawn on letters-of-credit to EBITDA for the most recent four fiscal quarters to be greater than 1.5 to 1.0 until the leverage ratio for two consecutive fiscal quarters is less than 3.0 to 1.0.

In addition, the amount the company can borrow is limited to the sum of 80% of accounts receivable and 50% of inventory of the company and its domestic subsidiaries.

The amendment was completed on Nov. 21.

Bank of America is the administrative agent on the deal.

Texas Industries is a Dallas-based supplier of heavy construction materials.

Table: Leverage Ratio

Fiscal Quarter Ratio

Nov. 30, 2008 4.50 to 1.00

Feb. 28, 2009 4.75 to 1.00

May 31, 2009 5.00 to 1.00

Aug. 31, 2009 5.00 to 1.00

Nov. 30, 2009 4.75 to 1.00

Feb. 28, 2010 4.50 to 1.00

May 31, 2010 4.50 to 1.00

Aug. 31, 2010 4.25 to 1.00

Nov. 30, 2010 and each fiscal quarter end thereafter 4.00 to 1.00

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