StoneMor amended its secured credit facility with a bank group led by Capital One as administrative agent, reducing the revolver from $210 million to $200 million.
The amended agreement increases the facility’s consolidated leverage ratio to 4.5x through the period ending December 31, 2017 stepping down to 4.25x for periods in fiscal 2018, and then reverting back to 4.0x. The revolver commitment was reduced from $210 million to $200 million.
The amendment also provides that, in calculating consolidated EBITDA for purposes of various financial covenants, the partnership is entitled to add back:
- Non-cash compensation expense attributable to equity compensation awards and certain other non-cash expenses
- Other non-recurring cash expenses, losses, costs and charges subject to a limit of $12 million for the period ended September 30, 2017 and periods ending December 31, 2017, March 31, 2018 and June 30, 2018, $4 million for the period ending September 30, 2018 and $2 million for periods thereafter
- Non-recurring cash expenses, costs and charges relating to the previously announced Securities and Exchange Commission investigation and related actions, ongoing class action litigation and any other non-ordinary course of business legal matters in an aggregate amount for all periods not to exceed $5 million.
Robert B. Hellman, Jr., chairman of the board of directors of the general partner, said, “The decision to reduce our cash distribution for the second quarter is a difficult, but necessary decision. As we have committed to our limited partners and banking partners, we will be living within the four corners of our balance sheet. While final results for the second quarter are still pending, visibility into cash flows led the Board to make the decision to use our cash to reduce leverage and target distributions at a level we believe will be more sustainable.”
Trevose, PA-based StoneMor Partners owns and operates cemeteries and funeral homes in the U.S. with 316 cemeteries and 98 funeral homes in 27 states and Puerto Rico.