Richardson Electronics obtains new $102 million revolver

By Sara Rosenberg

New York, Dec. 9 - Richardson Electronics Ltd. obtained a new $102 million revolver, which replaces existing lines. The new loan has relaxed leverage and coverage ratios (See tables 1 and 2), compared to the prior agreement and extends the maturity date 15 months to September 2005 with similar pricing.

Bank One is the administrative agent on the facility and Banc One Capital Markets is the arranger.

The interest rate is based on the company's leverage ratio. If the leverage ratio is less than 2.50 to 1.00 the rate is Libor plus 175 basis points. If the leverage ratio is less than 3.00 to 1.00 the rate is Libor plus 200 basis points. If the leverage ratio is less than 3.50 to 1.00 the rate is Libor plus 225 basis points. And, if the leverage ratio higher than 3.50 to 1.00 the rate is Libor plus 250 basis points, according to a filing with the Securities and Exchange Commission.

There is an upfront fee of 25 basis points for the loan and a facility fee of 25 basis points, the filing said.

Security for the loan is the company's trade receivables and inventory.

"We are pleased to extend the relationship with our lending group. The new agreement adds significant operating flexibility as we continue to promote stability in the current economic environment and focus on growth through market share gains," said Dario Sacomani, senior vice president and chief financial officer, in a news release.

Richardson Electronics is a LaFox, Ill. provider of engineered solutions serving the radio frequency and wireless communications, industrial power conversion, security and display systems markets.

Table 1: Richardson Electronics new leverage ratio covenant

Applicable Dates Maximum Ratio

Nov. 30, 2002 4.25 to 1.00

Feb. 28, 2003 and May 31, 2003 4.00 to 1.00

Aug. 31, 2003 and Nov. 30, 2003 3.85 to 1.00

Feb. 29, 2004 3.50 to 1.00

May 31, 2004 3.35 to 1.00

Aug. 31, 2004 and Nov. 30, 2004 3.15 to 1.00

Feb. 28, 2005 and thereafter 2.75 to 1.00

Table 2: Richardson Electronics new fixed charge coverage ratio covenant

Applicable Dates Minimum Ratio

Nov. 30, 2002 1.10 to 1.00

Feb. 28, 2003, May 31, 2003 and Aug. 31, 2003 1.15 to 1.00

Nov. 30, 2003 1.20 to 1.00

Feb. 29, 2004 1.30 to 1.00

May 31, 2004 1.40 to 1.00

Aug. 31, 2004 1.50 to 1.00

Nov. 30, 2004 1.30 to 1.00

Feb. 28, 2005 and thereafter 1.35 to 1.00

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