Menu Foods amends bank, note agreements, changing covenants, increasing rates

By Sara Rosenberg

New York, March 1 - Menu Foods Income Fund amended its $30 million bank and $85 million senior secured note facilities, modifying some covenants and increasing interest rates as of January, according to a company news release.

Currently, interest on the notes is 200 basis points higher than it was previously and interest on the bank facility is 125 bps higher than it was previously.

Interest is based on a pricing grid that can decrease as the fund's leverage ratio decreases. When the debt-to-EBITDA ratio is reduced to 3 to 1, the interest rates will return to levels under the prior agreements.

In addition, the amended agreements require that the fund not pay distributions until it is in compliance with the covenants set out in its former credit facilities, including a total debt-to-EBITDA ratio of 3 to 1 or less.

The fund is required to use its excess cash to reduce its indebtedness until this level of leverage is achieved.

Menu is a Streetsville, Ont.-based private-label/contract manufacturer of wet pet food products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.