Education Management subsidiaries get credit agreement default waiver

By Caroline Salls

Pittsburgh, June 23 – Some Education Management Corp. wholly owned subsidiaries entered into a limited waiver to a credit agreement on Monday, according to an 8-K filed with the Securities and Exchange Commission.

The subsidiaries include Education Management LLC and the other credit parties under a second amended and restated credit and guaranty agreement.

The consenting lenders agreed to waive until Sept. 15 any potential default arising from non-compliance with the total leverage ratio or interest coverage ratio covenants in the credit agreement for the test period ending June 30.

The waiver requires Education Management LLC to deliver a five-year business plan to the administrative agent by July 18 and to perfect the liens of the collateral agent on specified bank accounts within 30 days of the waiver’s effective date.

The waiver also requires additional Education Management Corp. subsidiaries to become credit parties within 30 days of the effective date.

In addition, the credit parties agreed not to make voluntary payments, restricted payments and dispositions from the effective date of the waiver until its expiration.

According to the 8-K, Danny D. Finuf rescinded his resignation from the position of president of Brown Mackie Colleges on Friday and was reappointed to the position.

Education Management is a Pittsburgh-based provider of private post-secondary education.

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