Euramax cuts pricing on $70 million revolver, gets overadvance loans

By Toni Weeks

San Luis Obispo, Calif., March 25 - Euramax Holdings, Inc. amended its $70 million senior secured revolving credit and guaranty agreement with Regions Bank as collateral and administrative agent and Regions Business Capital as sole lead arranger and bookrunner, according to an 8-K filing with the Securities and Exchange Commission.

The amendment reduced the margin over Libor to 175 basis points to 225 bps from 200 bps to 275 bps. The actual margin is based on average excess availability rather than corporate credit ratings.

The amendment also reduced the minimum excess availability threshold to $1 million, reduced the fixed-charge coverage ratio to 1.00 from 1.15, suspended the testing of the fixed-charge coverage ratio during the occurrence of a seasonal overadvance B or C, suspended the testing of the minimum consolidated EBITDA test except during the occurrence of a seasonal overadvance B or seasonal overadvance C and provided for the three mutually exclusive overadvance facilities.

The $15 million seasonal overadvance A is available from Feb.1 through May 31 of each year, and the $9 million seasonal overadvance B is available from Feb. 1 through Nov. 30 each year. Both the A and B seasonal overadvance facilities are subject to the company's maintaining a U.S. fixed-charge coverage ratio of 1.00. The $6 million seasonal overadvance C is available from Feb. 1 through Aug. 22 of each year, subject to maintenance of a minimum consolidated EBITDA over the trailing 12 months of $52 million.

According to a press release, the amendment is expected to improve liquidity and provides $15 million more borrowing capacity accessed through the seasonal overadvance facilities.

Norcross, Ga.-based Euramax manufactures building products made of aluminum, steel, vinyl and copper.

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