Earthtimes:
NexCen Brands, Inc. today announced that the Company has entered into an amendment of its credit facility with BTMU Capital Corporation (“BTMUCCâ€).
The amendment reduces the interest rate on the Class B Notes, the outstanding balance for which total approximately $41.7 million, to 8% per year effective January 20, 2009 through July 31, 2011, the maturity date on the Notes. As a result of the interest rate change, the Company anticipates interest expense reductions of approximately $2.2 million in 2009, $2.8 million in 2010 and $1.5 million in 2011. Prior to the amendment, the interest rate on the Class B Notes was 12% from August 15, 2008 through July 31, 2009, then 15% from August 1, 2009 through maturity of the Notes.
In addition to the change in interest rate on the Class B Notes, the amendment also gives the Company greater operating flexibility by: (i) reducing the debt service coverage ratio for 2009; (ii) allowing certain funds paid by supply vendors to be excluded from debt service obligations and capital expenditure limitations; (iii) narrowing the covenant causing a manager event of default upon NexCen filing a qualified financial statement to exclude the 2008 fiscal year; and (iv) eliminating the requirement for valuation reports for fiscal year 2008 unless requested by BTMUCC.