UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
February
4, 2009
________________
MONACO
COACH CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
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1-14725
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35-1880244
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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91320
Industrial Way,
Coburg,
Oregon 97408
(Address
of principal executive offices, including zip code)
(541)
686-8011
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[ ]
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
Entry into a Material Definitive Agreement.
On
February 4, 2009, Monaco Coach Corporation (the “Company”) entered into
agreements with Bank of America, N.A. and GE Commercial Distribution Finance
Corporation (the “Flooring Lenders”) with respect to certain repurchase
obligations (the “Forbearance Agreements”). As is typical in
the recreational vehicle industry, many of the independent retail dealers that
carry the Company’s products utilize wholesale floor plan financing arrangements
with third party lending institutions to finance their purchases of the
Company’s products. Under the terms of these floor plan arrangements,
lenders customarily require the recreational vehicle manufacturer to agree to
repurchase unsold units if the dealer defaults on its credit facility from the
lender, subject to certain inventory aging limits. The Company has
repurchase agreements with the Flooring Lenders, which are the primary flooring
lenders to the Company’s dealers. Due to the deterioration in the
market for recreational vehicles generally and resulting defaults by the dealers
under their credit lines with the Flooring Lenders, repurchase demands on the
Company by the Flooring Lenders have increased substantially above historical
levels.
The
increase in repurchase demands has also affected borrowing availability under
the Company’s Loan and Security Agreement, dated November 6, 2008, entered into
among Bank of America, N.A. as agent (“Revolver Agent”), the revolving credit
lenders party thereto, including among others, GE Commercial Distribution
Finance Corporation (“Revolver Lenders”), and the Company, as borrower (the
“Loan Agreement”). Under the Loan Agreement, the Company is able to
borrow amounts according to an accounts receivable and inventory borrowing base
formula that is subject to the imposition of reserves in certain
circumstances. The increasing repurchase demands by the Flooring
Lenders have had the effect of increasing the borrowing base reserves under the
Loan Agreement and reducing the Company’s borrowing availability.
To reduce
the Company’s immediate repurchase-related payment obligations to the Flooring
Lenders and eliminate the effect on the Company’s liquidity caused by the Loan
Agreement reserves, the Company and each Flooring Lender entered into a
Forbearance Agreement under which the Flooring Lenders agreed, with certain
material exceptions, to withdraw certain existing repurchase demands and forbear
from making additional repurchase demands through April 6, 2009 (the
“Forbearance Period”). In addition, the Flooring Lenders agreed that
during the Forbearance Period they would not exercise their rights of set-off
against amounts payable by the Flooring Lenders to the Company.
Notwithstanding
the execution of the Forbearance Agreements and the resulting favorable impact
on the Company’s liquidity, the Company will continue to pursue a variety of
strategic and financial alternatives given continued uncertainty in the
Company’s core markets and concerning the sufficiency of the Company’s capital
resources. As announced in a press release on January 5, 2009, the
Company has retained Imperial Capital to assist with the evaluation of strategic
alternatives for the Company. In addition, the Company has retained
Avondale Partners, LLC to evaluate strategic alternatives for Signature
Motorhome Resorts business and BMO Capital Markets to evaluate strategic
alternatives for its equine trailer division, Bison Manufacturing, LLC and its
specialty trailer division, Roadmaster LLC. There can be no assurance
that the Company will be successful in reaching agreements for any such
strategic transactions.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MONACO
COACH CORPORATION
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Date: February
10, 2009
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/s/
P. Martin Daley
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P.
Martin Daley
Vice
President and Chief Financial
Officer
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