Calgon Carbon Corp. amended and restated its $125 million facility after the company was not in compliance with the leverage covenant of its previous credit facility for the third quarter of 2005, said Leroy Ball, cfo. The maximum allowable debt to EBITDA ratio for the Pittsburgh, Pa., air and water purification systems maker was 3.25, which the company exceeded.
The company received a waiver from lenders through Jan. 31, but was still required to reclassify existing debt. Under the new terms, the company has some addbacks associated with the restructuring and the covenant, and the leverage ratio was bumped up for a period of time, gradually moving down over the course of the agreement. The new facility is also secured, while the previous one was unsecured.
The amended $118 million facility consists of a $100 million revolver and an $18 million term loan. It is secured by a security interest in favor of the lenders and a pledge agreement in favor of the lenders with regards to the stock of certain subsidiaries. Pricing is on a grid with regards to the leverage covenant and ranges from LIBOR plus 1 1/4% to LIBOR plus 2 1/2%. Ball said that pricing did not increase significantly with the new deal because a facility fee on the entire revolver was removed and replaced by just a commitment fee on the unused piece. "The revolver spread increased, but because of how we shifted things, the all-in fee is actually very comparable to what we had in the old agreement," he said.
The company may use the revolver for working capital, capital expenditures, letters of credit, acquisitions and other general corporate purposes.
National City Bank was the lead arranger, with PNC Bank, Harris Bank, First Commonwealth Bank and First National Bank of Pennsylvania also participating. National City has worked with the company for a number of years, Ball explained, and has led the current facility since 2003.