LONDON, Dec 17 (Reuters) - Lenders to HeidelbergCement AG have passed a waiver relaxing a covenant on loans used to back the acquisition of UK-based Hanson in mid-2007, a bank source close to the deal said on Wednesday.
The request passed with more than 90 percent lender consent, the source said.
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 covers the covenant test period beginning on Dec. 31. The company will provide more information to lenders in March 2009.
A second banking source said previously that 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.
In 2007, HeidelbergCement completed 8.75 billion pounds ($13.62 billion) and 3.4 billion euros ($4.76 billion) in acquisition financing to back the takeover of Hanson via bookrunners Deutsche Bank and Royal Bank of Scotland.
(Reporting by Alasdair Reilly; Editing by Sharon Lindores)
($1=.6422 Pound)
($1=.7137 Euro) Keywords: HC/WAIVER (alasdair.reilly@thomsonreuters.com; +44 20 7542 3197; Reuters Messaging: alasdair.reilly.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The request passed with more than 90 percent lender consent, the source said.
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 covers the covenant test period beginning on Dec. 31. The company will provide more information to lenders in March 2009.
A second banking source said previously that 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.
In 2007, HeidelbergCement completed 8.75 billion pounds ($13.62 billion) and 3.4 billion euros ($4.76 billion) in acquisition financing to back the takeover of Hanson via bookrunners Deutsche Bank and Royal Bank of Scotland.
(Reporting by Alasdair Reilly; Editing by Sharon Lindores)
($1=.6422 Pound)
($1=.7137 Euro) Keywords: HC/WAIVER (alasdair.reilly@thomsonreuters.com; +44 20 7542 3197; Reuters Messaging: alasdair.reilly.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.