Terex amends loan, modifying fixed-charge covenant and pricing

By Sara Rosenberg

New York, Feb. 25 - Terex Corp. amended its credit facility, easing the fixed-charge coverage ratio covenant during 2009 and the first quarter of 2010, and increasing pricing, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

The consolidated fixed-charge coverage ratio is now set at 1.25 to 1.00 for July 14, 2006 through and including March 31, 2009, 1.10 to 1.00 for April 1 through and including June 30, 0.80 to 1.00 for July 1 through and including March 31, 2010, and 1.25 to 1.00 thereafter.

Pricing on the credit facility was increased by 100 basis points and there is a provision that would increase the interest rates by an additional 100 bps if the company fails to achieve a consolidated fixed-charge coverage ratio of at least 1.00 to 1.00 for certain quarterly periods in 2009 and 2010.

Currently, pricing on the term loan is Libor plus 275 bps, and pricing on the revolver can range from Libor plus 200 bps to 225 bps based on leverage.

In addition, the amendment generally caps at $5 million the amount of share repurchases the company can make in each of the first two quarters of 2009. Share repurchases in 2008 will be excluded from the calculation of the consolidated fixed-charge coverage ratio for the first two quarters of 2009.

Credit Suisse is the administrative agent on the deal.

The amendment was completed on Feb. 24.

Terex is a Westport, Conn.-based diversified global manufacturer.

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