Racing Champions Amends Credit Agreement
6 September 2000
Racing Champions Amends Credit Agreement
GLEN ELLYN, Ill.--Sept. 6, 2000--Racing Champions today announced it signed an amendment on August 31, 2000 to its current credit agreement. Under the amended terms of the agreement, the Company can borrow up to $20 million on its revolving loan, based upon levels of the Company's accounts receivable and inventory. At August 31, 2000 there was $16 million outstanding on the revolving loan and the Company held approximately $17 million in cash and cash equivalents. The amended term loan, in the principal amount of $109.25 million, requires lower quarterly principal payments ranging from $3.125 million to $4 million per quarter with a final balloon payment on April 1, 2003. All borrowings under the credit facility are secured by substantially all of the assets of the Company and the facility maturity date is set at April 1, 2003.The term loan and the revolving loan bear interest, at the Company's option, at an alternate base rate plus a margin that varies between 0.15% and 1.75% or at a LIBOR rate plus margin that varies between 0.90% and 3.50%. The applicable margin is based on the Company's ratio of consolidated debt to consolidated EBITDA and is currently set at the highest level. Under the terms of the Company's amended credit agreement, the Company is in compliance with quarterly financial and non-financial covenants. The key financial covenants include leverage ratio, minimum EBITDA and maximum capital expenditures.