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Ferro amends loan, modifying pricing and covenants
By Sara Rosenberg
New York, March 11 - Ferro Corp. amended its credit facility on Wednesday, increasing pricing and revising the leverage and fixed-charge coverage ratios, according to an 8-K filed with the Securities and Exchange Commission.
Under the amendment, pricing on the company's revolver can now range from Libor plus 450 basis points to 600 bps based on leverage, and pricing on the term loan is now set at Libor plus 600 bps.
The commitment fee on the revolver was increased to a range of 50 bps to 75 bps.
As for covenants, the maximum permitted leverage ratio was increased and it will now vary by fiscal quarter from 5.25 to 7.00 over the remaining term of the credit facility.
Also, the minimum permitted fixed-charge coverage ratio was decreased so that it will now vary by fiscal quarter from 1.0 to 1.2 over the remaining term of the loan.
In addition, a minimum quarterly EBITDA requirement for the 2009 fiscal year was added to the credit agreement.
Other terms of the amendment include eliminating the $50 million revolver accordion feature, increasing the amount of the annual excess cash flow required to be used to repay term loans, requiring additional financial reporting to lenders, limiting investments or acquisitions, restricting payments on the company's capital securities, and requiring that certain proceeds be used for bank debt repayment and revolver commitment reductions, with a minimum revolver size of $150 million.
Credit Suisse is the administrative agent on the term loan and National City Bank is the agent on the revolver.
Ferro is a Cleveland-based supplier of technology-based performance materials for manufacturers.
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