Remington Arms amends loan to waive non-compliance with financial covenants, change rates

By Sara Rosenberg

New York, Nov. 14 - Remington Arms Co. Inc. amended its credit facility, obtaining a waiver of non-compliance with financial covenants from Sept. 30 through Dec. 30 and changing interest rates, according to a filing with the Securities and Exchange Commission.

Wachovia is the administrative agent and collateral agent on the deal.

Under the amendment, amounts outstanding now bear interest at Libor plus 300 basis points. The rate can be adjusted based on the company's financial performance (see tables 1 and 2).

Other terms of the amendment include maintaining a minimum availability of $35 million except during any single period of up to 60 consecutive days from June through September of each year, when the minimum availability requirement may be reduced to $25 million; limitations on capital expenditures exceeding $12.5 million during any fiscal year; and limitations on indebtedness, liens, investments, mergers and other acquisitions, asset dispositions, transactions with affiliates, and dividends and other distributions.

If the minimum availability requirement is not met, the company must maintain a maximum leverage ratio of 6-to-1 and a minimum fixed charge coverage ratio of 1.1-to-1.

In return for the amendment, the company paid a $200,000 fee.

Remington Arms is a Madison, N.C., designer, producer and seller of sporting goods products for the hunting, shooting sports and fishing markets.

Table 1:

New spread on Remington Arms facility during the availability test period

Average Consolidated Funded Debt to EBITDA Ratio Applicable Margin

Greater than 4.75-to-1 3.00%

Greater than or equal to 4.25-to-1 and less than 4.75-to-1 2.75%

Greater than or equal to 3.75-to-1 and less than 4.25-to-1 2.50%

Greater than or equal to 3.25-to-1 and less than 3.75-to-1 2.25%

Greater than or equal to 2.75-to-1 and less than 3.25-to-1 2.00%

Less than 2.75-to-1 1.75%

Table 2:

New spread on Remington Arms facility if other than the availability testing period

Average Consolidated Funded Debt to EBITDA Ratio Applicable Margin

Greater than or equal to 5.75-to-1 3.50%

Greater than or equal to 5.25-to-1 and less than 5.75-to-1 3.25%

Greater than or equal to 4.75-to-1 and less than 5.25-to-1 3.00%

Greater than or equal to 4.25-to-1 and less than 4.75-to-1 2.75%

Greater than or equal to 3.75-to-1 and less than 4.25-to-1 2.50%

Greater than or equal to 3.25-to-1 and less than 3.75-to-1 2.25%

Greater than or equal to 2.75-to-1 and less than 3.25-to-1 2.00%

Less than 2.75-to-1 1.75%

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