NCI Building Systems may recapitalize or redeem 2.125% convertibles

By Angela McDaniels

Tacoma, Wash., May 21 - NCI Building Systems, Inc. will have to recapitalize or redeem its 2.125% convertible senior subordinated notes due 2024 in order to close on a proposed equity investment in the company by a private equity firm, according to a company news release.

The deal will also require the refinancing of the company's existing credit facilities.

NCI said it is in advanced stages of negotiations with the equity firm about the equity investment, which it called "substantial."

In addition, the company received a waiver from its senior credit facility lenders of its financial maintenance covenants and of restrictions on its ability to enter into an agreement for the equity investment in the company.

The waiver is good through July 15 and would be automatically extended to Sept. 15 if a definitive agreement for an equity investment were signed.

As previously reported, the company's revolving credit facility matures in June, and the convertibles are putable in November. If the revolver is not renewed, NCI will not be allowed to repurchase any convertibles that are put back to it.

Failure to pay on the convertibles would cause the company to be in default under both the notes and the senior secured credit facility and could result in all $473 million of debt outstanding under the agreements to be declared immediately due and payable. NCI said that absent a refinancing, it would be unable to repay this debt.

NCI Building Systems is a Houston-based integrated manufacturer of metal products for the nonresidential building industry.

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