Bank of America served as agent on amendments to Commercial Vehicle Groups’ term loan and security agreement as well as its asset-based revolving credit facility.
The new agreement amends the terms of existing agreements and temporarily suspends the leverage ratio covenant through the fiscal quarter ending Dec. 31, 2020, and resets the leverage ratio covenant levels for quarterly periods ended March 31, 2021, through Sept. 30, 2021, before returning to the original leverage ratio covenant for the quarterly period ended on Dec. 31, 2021.
The amendment also temporarily adds a new minimum consolidated liquidity covenant of $40 million for the quarters ended June 30, 2020, through Sept. 30, 2021, and amends certain restrictive covenants limiting the company’s ability to incur additional debt, grant liens, repurchase the company’s stock and to issue dividends or make investments. The amendment increases the ability of the company to restructure its operations. The maturity date remains unchanged.
The revolving amendment amends the terms of the revolving loan agreement to align certain of the restrictive covenants with the restrictive covenants set forth in the term loan agreement, as amended.
“We are pleased with this new agreement as it provides our lenders with appropriate financial returns and provides the company with additional flexibility to right-size certain parts of the company to a post-COVID environment,” Harold Bevis, president and CEO of Commercial Vehicle Group, said. “The coronavirus has impacted over half of our business and this needs to be properly addressed. This new agreement expands our ability to improve as a company and we are thankful. We continue to believe that our ample liquidity is sufficient to meet our operating needs, our new growth needs and our restructuring needs.”
Commercial Vehicle Group is a supplier of electrical wire harnesses, seating systems and other cab related products for the global commercial vehicle markets.
