On Command Corp. has revamped its credit facility in conjunction with the receipt of a $40 million subordinated loan via its parent company Liberty Media Corp. Working with a syndicate of commercial banks led by the company's long-time relationship bank, Bank of New York, On Command was able to extend out the maturities on its bank line and achieve some breathing room under its covenants, explained Bernard Dvorak, On Command's senior v.p., cfo and treasurer. In conjunction with the concessions, the company reduced the commitments under a $275 million revolver by the $40 million from the Liberty Media loan. The company then altered the revolver with a $50 million revolver and a $185 million term loan, noted Dvorak.
As a provider of interactive in-room entertainment, information and business services to the lodging industry, On Command took a hit following the terrorist attacks of Sept. 11 and needed some breathing room under its covenants. While the company was able to receive an amendment to its covenants for 2002, when the original covenants kicked back in for 2003, the company's business had not yet recovered, Dvorak noted. In addition, On Command was anticipating a bullet maturity in 2004 and wanted to extend the credit. In exchange for the repayment with the Liberty Media loan, the banks were willing to extend the maturities and give the company covenant relief, he said.
The credit facility will now mature in 2007. Pricing on both tranches is tied to a leverage-based grid, currently at LIBOR plus 31/2%. The former facility carried pricing of LIBOR plus 23/4%. The subordinated loan carries a fixed coupon of 10%, which will accrue until the piece's maturity date in December 2008.