UPDATE: American Axle Gets Covenant Waiver On Loans
July 07 2009 - 2:09PM
Dow Jones News
Lenders to American Axle & Manufacturing Holdings Inc. (AXL)
have agreed to an amendment and waiver on its revolving credit
facility, giving the company until the end of the month to meet
terms on the debt.
The loan was previously renegotiated last November, and the
latest waiver runs through July 30, the company said in a
Securities and Exchange Commission filing Tuesday.
American Axle, which makes axles for General Motors Corp.
(GMGMQ), had about $280 million of liquidity, consisting of
available cash, short-term investments and committed borrowing
capacity on its revolver, according to the filing.
JPMorgan Securities Inc. and Banc of America Securities LLC are
lead arrangers on the loan. Justin Perras, a spokesman for JPMorgan
declined to comment. Banc Of America spokeswoman Louise Hennessy
also declined to comment.
Chris Son, a spokesman for American Axle, did not comment
further on the amendment and waiver.
The borrowing capacity under the revolver stands at $476.9
million through April 2010 and at $369.4 million through December
2011, according to Standard & Poor's LCD unit.
The company previously amended the revolver in November,
extending the maturity of a portion of the facility to December
2011 from April 2010.
American Axle relies on GM for about 75% of its revenue. The
company continues to be rocked as GM, which filed for bankruptcy
protection June 1, slices production amid a worldwide recession
that has pushed auto sales to historic lows.
JPMorgan analysts Himanshu Patel and Ryan Brinkman believe
bankruptcy for American Axle is possible, if not imminent. In a
note to clients Monday, the analysts listed three possibilities for
the company: covenant extensions, aid from General Motors and
American Axle Chief Executive Dick Dauch fighting to avoid Chapter
11.
American Axle's waiver comes as Lear Corp. (LEAR), a maker of
automotive seats and electronics, became the latest supplier to
file for bankruptcy protection.
Eight major suppliers have filed for bankruptcy, including big
names such as Delphi Corp. (DPHIQ) and Collins & Aikman Corp.
The number increases to more than a dozen when expanded to smaller
or privately owned suppliers.
American Axle's 5.25% bonds due 2014 were lower in light trade
Tuesday, according to online trading platform MarketAxess, which is
showing quotes at 28 cents on the dollar.
The company's shares were recently down 51 cents, or 18%, at
$2.33.
Son, the company's spokesman, indicated that it expects to
announce its second-quarter earnings at the end of July.
-By Kate Haywood, Dow Jones Newswires; 212-416-2218;
kate.haywood@dowjones.com
(Jeff Bennett in Detroit and Geoffrey Rogow contributed to this
report.)