Sequa, a diversified manufacturing and technology company, has cancelled its $75 million revolver ahead of the October 2002 maturity and is now seeking a new facility. The J.P. Morgan-led credit was terminated because Sequa did not expect to be in compliance with certain financial covenants of the revolver, said Linda Kyriakou, spokeswoman for Sequa. Kyriakou declined to comment on the level of borrowings on the revolver at time of cancellation.
The expected non-compliance is based on a gloomy assessment for earnings in the fourth quarter of 2001. Kyriakou cites the deteriorating economic conditions exacerbated by the Sept. 11, 2001 terrorist attacks. The culprit covenant is said to be a cash-flow ratio. It is too early to say what form a new revolver will take or when it will be completed, said Kyriakou. She declined comment on the banks being spoken to and whether Sequa is seeking a new lending group. A J.P. Morgan spokesman declined comment.