Allied Holdings obtains new credit facility to refinance old facility, subordinated debt

New York, Feb. 27 - Allied Holdings, Inc. said it refinanced its revolving credit facility and $40 million of subordinated debt.

The Decatur, Ga. company said it obtained a total of $202.75 million of new financing. Of that figure, Ableco Finance LLC and Foothill Capital Corp. provided a new $173.5 million credit facility made up of a revolving facility and term loans.

Proceeds from the term loans were used to reduce borrowings on its revolver and to repay its $40 million of 12% subordinated notes scheduled to mature Feb. 1, 2003. Allied paid $37.25 million for the subordinated debt, part of it in the form of $29.25 million of new financing from the existing subordinated debt holders, John Hancock Life Insurance Co. and Northwestern Mutual Life Insurance Co.

Allied's new facility matures in February 2005 and is secured by all assets of the company and its subsidiaries other than its captive insurance company.

"Our new partnership with Ableco Finance and Foothill Capital establishes a stable and innovative credit facility that will further support the turnaround that is already underway," said Hugh E. Sawyer, Allied's president and chief executive officer, in a news release.

The new facility is structured as four separate term loans and a revolver:

--A $17.5 million senior term loan A due Feb. 25, 2005 with amortizing principal. Interest is prime plus 275 basis points with a minimum of 7.5%.

--A $25 million senior term loan B due Feb. 25, 2005 with amortizing principal. Interest is prime plus 650 basis points with a minimum of 11.5%. As long as there is no default, 350 basis points of this will be capitalized and added to the principal amount.

--An $11 million senior term loan C due Feb. 25, 2005. Interest is prime plus 900 basis points with a minimum of 14%. As long as there is no default, 500 basis points of this will be capitalized and added to the principal amount. A funding fee of $3 million will be added to the principal amount.

--A $29.25 million subordinated term loan D due Feb. 28, 2005. Interest is at prime plus 350 basis points.

--A revolving credit facility of up to $120 million due Feb. 25, 2005 at Libor plus 450 basis points or prime plus 150 basis points, with a minimum for either of 6.5%. There is also a 50 basis points annual fee on the unused portion of the revolver.

Covenants set required levels for Allied Holdings' leverage ratio, fixed charge coverage ratio, consolidated EBITDA (earnings before interest, taxation, depreciation and amortization) for 12 month periods.

Month	Leverage Ratio	Fixed charge coverage	EBITDA
February 2002	2.80:1.0	0.47:1.0	$30,600,000
March 2002	2.75:1.0	0.61:1.0	$39,500,000
April 2002	2.70:1.0	0.70:1.0	$42,225,000
May 2002	2.50:1.0	0.76:1.0	$45,400,000
June 2002	2.00:1.0	0.81:1.0	$49,265,000
July 2002	2.00:1.0	0.82:1.0	$50,760,000
August 2002	2.00:1.0	0.86:1.0	$53,870,000
September 2002	1.85:1.0	0.84:1.0	$54,270,000
October 2002	1.75:1.0	0.85:1.0	$56,150,000
November 2002	1.75:1.0	0.88:1.0	$58,330,000
December 2002	1.75:1.0	0.88:1.0	$60,000,000
January 2003	1.75:1.0	0.90:1.0	$61,595,000
February 2003	1.75:1.0	0.93:1.0	$63,325,000
March 2003	1.50:1.0	0.96:1.0	$65,235,000
April 2003	1.50:1.0	0.98:1.0	$66,835,000
May 2003	1.50:1.0	1.00:1.0	$67,975,000
June 2003	1.25:1.0	0.97:1.0	$68,400,000
July 2003	1.25:1.0	0.98:1.0	$68,500,000
August 2003	1.25:1.0	0.98:1.0	$68,700,000
September 2003	1.25:1.0	0.96:1.0	$69,385,000
October 2003	1.25:1.0	0.97:1.0	$69,865,000
November 2003	1.25:1.0	0.97:1.0	$70,000,000
December 2003 and each month after that	1.25:1.0	0.94:1.0	$70,000,000

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