Fleetwood amends loan, allowing for notes exchange, increasing revolver pricing

By Angela McDaniels and Sara Rosenberg

New York, Oct. 30 - Fleetwood Enterprises Inc. amended its senior secured credit facility, allowing for the exchange of its 5% convertible senior subordinated notes due 2023 for senior secured notes or senior subordinated notes, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

The senior secured notes can be secured by second-priority liens on real estate that constitutes collateral for the obligations under the senior secured credit facility and first-priority liens on additional real estate that does not constitute collateral for the obligations under the senior secured credit facility.

In addition, the amendment increased pricing on the revolver to a range of Libor plus 250 basis points to 350 bps based on the fixed-charge coverage ratio, and decreased the revolver size to $135 million from $160 million, or $185 million during the period from Dec. 1 to April 30 of each calendar year.

Furthermore, the amendment replaced the fixed-charge coverage ratio covenant with an adjusted cash gain/loss covenant and a minimum liquidity covenant of $20 million. The adjusted cash gain/loss covenant applies if average daily liquidity falls below $45 million for any calendar month or if liquidity falls below $25 million on any one day.

The amendment also provides that certain properties which secured the term loan will secure revolving loans as "boot collateral," so that the aggregate value of all "boot collateral" increases to not less than $37 million from about $28 million.

The real estate term loan commitment was eliminated, and borrowings of $12.8 million were repaid in full, according to a company news release.

The amendment also reduced the total amount of real estate collateral held by the lenders to $58 million from $79 million.

The new notes will be issued under an exchange offer being held for the company's $100 million 5% convertible senior subordinated debentures due 2023. Fleetwood is hoping to reduce the amount of convertibles it will have to repurchase when they become putable on Dec. 15.

The company said the successful completion of the exchange offer will allow it to preserve liquidity and avoid dilution of existing shareholders and give it further opportunity to stabilize its businesses and strengthen its competitive position during the expected recovery of the markets for its products.

The amendment was completed on Oct. 29.

Bank of America is the agent on the deal.

Fleetwood is a Riverside, Calif.-based producer and distributor of recreational vehicles and manufactured housing.

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