ACCO Brands seeks loan amendment to revise covenants and pricing

By Sara Rosenberg

New York, Dec. 4 - ACCO Brands Corp. is seeking an amendment to its credit facility that will provide covenant relief through 2012 and increase pricing, according to a market source.

Citigroup is leading the amendment that was launched to lenders with a call on Wednesday.

Under the proposal, the total leverage ratio, which is currently 3.75 times, would go to 5.5 times through Sept. 30, 2009, 5.25 times through Dec. 31, 2009, 5.0 times through Dec. 31, 2010, 4.5 times through Dec. 31, 2011 and 4.0 times through Dec. 31, 2012.

Also, the interest coverage ratio, which is currently 3.0 times, would go to 2.25 times through Dec. 31, 2009, 2.5 times through Dec. 31, 2010, 2.75 times through Dec. 31, 2011 and 3.0 times through Dec. 31, 2012, the source remarked.

As part of the amendment, pricing on the facility would be increased to Libor plus 400 basis points from Libor plus 175 bps, the unused fee on the revolver would be increased to 75 bps and a 3.25% Libor floor would be added to the deal, the source continued.

In addition, lenders would get a 75 bps amendment fee for their consents, which are due on Dec. 12.

ACCO is a Lincolnshire, Ill.-based designer, developer, manufacturer and marketer of branded office products.

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