Allied Capital amends revolver, private notes

By Jennifer Chiou

New York, Dec. 31 - Allied Capital Corp. announced that it amended some terms under its revolving credit facility as well as its private notes.

According to a news release, the amendments to the revolver and the private notes increase the interest rate of the private notes by 100 basis points and increase the applicable spread on any borrowings made under the revolver by 100 bps. In addition, these amendments required a 50 bps amendment fee.

In addition, under the amendments, Allied Capital may not prepay, redeem, purchase or otherwise acquire any of its currently outstanding public notes prior to their stated maturity.

The amendments also reduce Allied Capital's capital maintenance covenant to the greater of $1.5 billion and 85% of consolidated adjusted debt.

The changes also reduce Allied Capital's interest charges coverage ratio covenant, determined as of the last day of each fiscal quarter for the period of four consecutive fiscal quarters, to 1.4 to 1 for the fiscal quarter ended Dec. 31 and each fiscal quarter thereafter to and including the fiscal quarter ending Dec. 31, 2009; 1.6 to 1 for the fiscal quarter ending March 31, 2010 and each fiscal quarter thereafter to and including Dec. 31, 2010; and to 1.7 to 1 for the fiscal quarter ending March 31, 2011 and each fiscal quarter thereafter.

Allied Capital said it remains subject to a minimum 200% asset coverage ratio for both the revolver and the private notes.

The amendments add new covenants that require Allied Capital to grant to the private noteholders and the revolver lenders a first-priority lien on substantially all of its assets no later than Jan. 30 and to maintain a ratio of consolidated total adjusted assets to secured debt of not less than 2.25 to 1, the release noted.

Also, prior to Dec. 31, 2010, Allied Capital will be required to limit the payment of dividends to a maximum of $0.20 per share per fiscal quarter and will be restricted from purchasing, redeeming or retiring any shares of its capital stock or any warrants, rights or options to purchase or acquire any shares of its capital stock for an aggregate consideration in excess of $60 million.

Bank of America is the lead agent on the revolver.

Washington-based Allied Capital is a business development company.

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