RHI Entertainment subsidiary's credit agreement forbearance extended

By Caroline Salls

Pittsburgh, Jan. 28 - RHI Entertainment, Inc.'s indirect subsidiary RHI Entertainment, LLC has obtained an extension to Feb. 26 of its forbearance agreement with the lenders and administrative agent for its $225 million credit, security and counterparties to its interest rate hedge agreements, guarantee and pledge agreement, according to an 8-K filed Thursday with the Securities and Exchange Commission.

In addition to the extension, the forbearance agreement amendment extends the temporary waivers for some specified defaults to Feb. 26 and increases the company's minimum cash balance requirement to $12.5 million.

The amendment also provisionally waives the requirement to provide borrowing base certificates, requires more detailed reporting and reconciliation on accounts payable and receivable, requires RHI Entertainment, LLC to add one of its subsidiaries as guarantor under the first-lien credit agreement and adds specified defaults.

As previously reported, the defaults covered under the forbearance agreement include non-compliance with the mandatory prepayment covenant, failure to pay settlement amounts payable upon the termination of swaps and modifications of contracts with a customer.

During the forbearance period, the company may not borrow additional loans and pricing was increased by 200 basis points.

Also, covenants related to investments, restricted payments, permitted liens, asset sales, subsidiary guarantors, control agreements and cash expenditures and distributions became more restrictive.

RHI has engaged Rothschild Inc. as a financial adviser and has broadened discussions with its lenders about a restructuring of its debt and capital structure.

The talks with lenders could result in a prepackaged or pre-negotiated bankruptcy filing or the sale of some or all of the company's assets.

RHI is a New York-based developer, producer and distributor of new made-for-television movies, miniseries and other television programming.

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