LAKE FOREST, Ill. — Tenneco said this week that its senior lenders have agreed to amend certain terms of its senior secured credit facility, which includes revising the financial covenant ratios under the facility for each quarter, beginning with first quarter 2009 and continuing through second quarter 2011. The company sought the amendment in response to the ongoing challenging macroeconomic environment and difficult industry conditions that have decreased automotive production volumes globally.
The company also announced that it successfully renewed its U.S. securitization facility in the amount of $100 million through Feb. 22, 2010. Tenneco’s limit for securitizing receivables under its credit facilities is $250 million and the company has the flexibility of using sources globally in an effort to fully utilize the amounts under the limit.
Tenneco is required to meet two compliance ratios under its senior credit agreement: a maximum leverage ratio (total debt/EBITDA) and a minimum interest coverage ratio (EBITDA/interest expense).
Tenneco has agreed to pay each consenting lender a fee. That fee plus other amendment costs are expected to total approximately $8 million.
