Decision looms on HeidelbergCement loan waiver

Decision looms on HeidelbergCement loan waiver
15 December 2008

Lenders to HeidelbergCement AG have until the end of the day to approve a waiver request on loans backing the acquisition of UK-based Hanson in mid-2007, banking sources close to the deal said on Friday.

The request, which will adjust the debt-to-EBITDA ratio covenant on the deal to 4.25 times from 4 times over a test period, would recognise the effects of currency changes on the company’s dollar-denominated debt.

The one-time waiver would cover the December covenant test period. The company will provide more information to lenders ahead of the next test period in March 2009.

The request requires 67 per cent approval and lenders to the deal are positive ahead of the decision, the sources said, adding the decision could be pushed into next week.

A banking source said the request was not radical but was sensible in the current financial climate.

Over the past two months, HeidelbergCement’s senior debt has been downgraded to sub-investment grade levels over refinancing concerns. The company is rated BB- by Standard and Poor’s, Ba3 by Moody’s and BB- by Fitch.

Source: Thomson Reuters 2008
Published under Cement News