Stanley Furniture amends note agreement, waiving two covenants for fiscal 2009

By Angela McDaniels

Tacoma, Wash., Jan. 29 - Stanley Furniture Co., Inc. said it amended its note purchase and private shelf agreement so that two financial covenants will not apply during fiscal year 2009.

The amendment covers the consolidated operating income-to-consolidated fixed charges ratio covenant and the consolidated debt-to-consolidated EBITDA ratio covenant, according to an 8-K filing with the Securities and Exchange Commission.

The company agreed to maintain at least $20 million of unrestricted cash on hand through March 30, 2010 and to maintain earnings before interest and taxes of not less than a loss of $10 million for each of the 12-month periods ending March 31, June 30, Sept. 30, 2009 and Dec. 31, 2009.

The note agreement is with Prudential Insurance Co. of America, Pruco Life Insurance Co. of New Jersey, Prudential Retirement Insurance and Annuity Co., Hartford Life Insurance Co., Mutual of Omaha Insurance Co. and Medica Health Plans.

Prudential Insurance, Hartford and Medica hold the company's notes issued in 2001. The remaining companies, as well as Prudential Insurance, hold Stanley's notes issued in 2007.

The amendment was made on Jan. 23.

Stanley makes residential wood furniture and is based in Stanleytown, Va.

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