NEW ALBANY, Ohio — Commercial Vehicle Group has entered into an asset based Loan and Security Agreement with Bank of America, N.A. for $47.5 million. The Credit Facility is due January 2012 and bears interest at LIBOR or Prime plus an applicable margin. The company has paid in full its borrowings under its previous senior credit agreement with borrowings under the Credit Facility and will utilize the new Credit Facility for ongoing operating and working capital requirements.
"Successfully completing a new financing arrangement in today’s economic and credit environment speaks to our financial flexibility and positive outlook for the future," stated Chad Utrup, chief financial officer of Commercial Vehicle Group. "The new ABL structure provides relief from recent covenant compliance pressures under our previous senior credit agreement while at the same time keeps our ongoing interest costs relatively unchanged," added Utrup.
The Credit Facility contains certain compliance requirements including minimum operating performance targets and capital expenditure limitations during the first year of the agreement and a fixed charge coverage ratio after year one of the agreement.
The company paid approximately $2 million in one-time financing fees and related expenses for the Credit Facility and expects to amortize substantially all of this cost over the three year life of the agreement. In addition, the company estimates it will incur a one-time non-cash charge of approximately $0.8 million related to the unamortized portion of its previous senior credit agreement which was scheduled to expire in 2010. The company’s existing $150 million 8 percent senior notes due in 2013 will not be affected by the new ABL structure.
