Allied Capital line-of-credit commitments terminated

By Caroline Salls

Pittsburgh, April 1 - Allied Capital Corp.'s lender agent has terminated all of the unused commitments under the company's revolving line of credit, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

As previously reported, the company is in default of covenants contained in the revolving line of credit and private notes, restricting it from borrowing or obtaining letters of credit under the revolver and declaring dividends or other distributions to shareholders.

Allied said it is continuing to seek a comprehensive restructuring with the revolver lenders and private noteholders to provide long-term operational flexibility.

As a result of the termination, the company said the total commitments under the revolving line of credit have been reduced to $165 million. As of March 27, Allied had $50 million in outstanding borrowings and $113.5 million in outstanding letters of credit issued under the line of credit.

According to the 8-K, neither the lenders nor the private noteholders accelerated repayment of the debt obligations, and the company has not experienced any default or cross default on its publicly issued unsecured notes.

Washington, D.C.-based Allied Capital is a business development company.

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