Wolverine Tube enters into limited waiver with bank lenders

New York, Feb. 7 - Wolverine Tube, Inc. said it entered into a limited waiver with lenders on its $200 million revolving credit facility to address "any potential financial covenant violations."

The Huntsville, Ala. metal products company said the agreement waives compliance with financial covenants from Dec. 31, 2001 through April 16, 2002.

In return, Wolverine Tube agreed to limit borrowings to $130 million and will secure new borrowings after the date of the waiver with its U.S. accounts receivable and inventory.

Wolverine Tube will pay a higher interest rate of Libor plus 300 basis points and also agreed to limit some non-operating activities. Previously interest was set by a pricing grid with a maximum rate of Libor plus 200 basis points.

As of Feb. 4, Wolverine Tube had $100 million outstanding on the credit facility.

The company also said it is in the process of negotiating a refinancing of the credit facility, which matures April 30, 2002.

"Given the current recession and general business environment, the limited waiver provides the company with adequate time to either refinance or restructure the facility with an appropriate financing facility that meets the longer-term needs of the company," said Jed Deason, Wolverine Tube's chief financial officer, in a news release.

Wolverine Tube's credit facility is with Credit Suisse First Boston as administrative agent and Mellon Bank, NA as documentation agent.

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