Neose Technologies increases variable-rate revenue bond interest rate by 200 bps

By Angela McDaniels

Seattle, March 13 - Neose Technologies Inc. amended its financing agreement with Brown Brothers Harriman & Co. and the Montgomery County Industrial Development Authority, according to an 8-K report filed with the Securities and Exchange Commission on Monday.

The amendment increases the interest rate on the variable-rate revenue bond issued by the Development Authority by 200 basis points and held by Brown Brothers and imposes a prepayment premium if the bonds are redeemed before maturity.

The prepayment premium will be 3% if the redemption occurs before June 30, 2% if the redemption occurs after June 30 and before Dec. 31, 2006 or 1% if the redemption occurs after Dec. 31, 2006, according to the filing.

Additionally, the amendment removed a covenant that gave the bank the option to require additional collateral from Neose in the form of a letter of credit or a security interest in cash and short-term investments after Jan. 30, 2008 or if the company failed to maintain at least $22 million of cash and short-term investments.

The amendment added a requirement that the company maintain a minimum cash and short-term investments balance of at least $5 million, according to the filing.

Neose is a biopharmaceutical company based in Horsham, Pa., that uses its proprietary enzymatic technologies to develop improved drugs, primarily therapeutic proteins.

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