Amkor Technology extended an amendment to its bank covenants through December 2003 in order to maintain more flexibility during a severe industry downturn, according to Kenneth Joyce, cfo. When the company's credit facility was originated, the covenants were based on liquidity and cash flow, Joyce noted. But as the West Chester, Pa., company was hit by the technology slump, it could no longer uphold the same terms. The current covenants were implemented for the year ending this December but, because the company had not violated the covenants this year, the lenders felt comfortable extending the amendment through December 2003, he said.
The amended covenants include measures for a minimum daily liquidity level of $140 million and a maximum quarterly capital expenditures limit of $25 million. They also include a minimum lagging 12-month EBITDA that started at $120 million last quarter and rises to $220 million by the fourth quarter of 2003. The extension did not involve any prepayments or interest rate changes, Joyce said.
The current credit facility comprises a $100 million revolver and a $97 million "B" term loan. The original $900 million facility included a $200 million revolver that has since been reduced and $700 million in "A" and "B" tranches that have been paid down to $97 million. Pricing on the revolver remains at LIBOR plus 33/ 4%, while pricing on the term loan stands at LIBOR plus 4%. There also is a 3/4% commitment fee on the revolver. Amortization payments of $12 million per quarter will be due on the term loan beginning in December 2003.
Citibank leads the credit facility, which is syndicated among several banks and institutions, Joyce noted. "They've been very cooperative in a tough environment," he said of Citibank.