Unicco obtains new loan, amends notes

New York, Aug. 8 - Unicco Service Co. said it refinanced its revolving credit facility with a new $60 million revolver and amended the terms of its notes with unanimous consent of holders.

The new credit facility is with The CIT Group/Business Credit Inc. It runs for three years and replaces a similar facility with other lenders, Unicco said.

The amendment to the notes affects the $47 million of 9 7/8% senior subordinated notes due 2007 issued by Unicco and Unicco Finance Corp.

In July, Unicco said it was seeking waivers and amendments so that it would comply with certain provisions of the note indenture and to allow it to engage in a series of transactions involving Ashmont Insurance Co. Ltd., an insurance company under common control with Unicco that from 1995 through March 31, 2002 served as re-insurer for some of Unicco's insurance policies.

Unicco said it has held discussions with holders owning $20 million of the $47.2 million notes outstanding and they have agreed to support the proposed waivers and amendments.

The waivers relate to events and transactions involving Ashmont since 1998 which, depending in part upon the interpretation of Unicco's insurance program policies and agreements, may have resulted in Unicco's failure to comply with the provisions of the note indenture, according to documents previously filed with the Securities and Exchange Commission.

The amendments are intended to help Unicco refinance its credit facility and to avoid future violations like those that resulted from the Ashmont transactions, Unicco said.

Under the amendment, the interest rate on the notes would be increased to 13%, increasing 100 basis points if the company fails to meet requirements to repurchase notes of $1 million plus 50% of excess cash flow or to use asset sale proceeds to repurchase notes.

Unicco also said it would pay a consent fee of $1 million plus a further $3 million when the notes mature on Oct. 15, 2007 - unless the notes are redeemed in full by March 31, 2006.

Unicco is a Newton, Mass. facilities services outsourcing companies.

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