CB Richard Ellis changes loan covenants and pricing, permits loan buybacks

By Sara Rosenberg

New York, March 24 - CB Richard Ellis Group Inc. reached an agreement to amend its credit facility, revising covenants and pricing, and allowing for the repurchase of term loan debt at a discount, according to a news release.

Covenant changes under the amendment include an increase to the maximum leverage ratio to 4.25 times from 3.75 times through March 31, 2011, a decrease to the minimum interest coverage ratio to 2.00 times from 2.25 times through March 31, 2011, and modifications to the calculation of EBITDA.

Pricing on the revolver and tranche A loan can now range from Libor plus 275 basis points to 500 bps, and pricing on the tranche A-1 and tranche B loans can now range from Libor plus 400 bps to 500 bps. Based on the company's leverage ratio at the end of 2008, revolver ad tranche A pricing is Libor plus 375 bps and tranche A-1 and tranche B pricing is Libor plus 400bps.

In addition, a 2% Libor floor was added to the deal.

The amendment also allows the company to establish a receivables financing facility, to make future loan modification offers to holders of existing tranches of debt, and to have subordinated debt be excluded from total debt for covenant purposes if the proceeds are used to prepay existing debt.

As part of the amendment, the company has agreed to make a $105 million voluntary prepayment of up to two quarters of scheduled amortization payments on all term loans at par upon closing of the amendment.

Lenders are getting a 50 bps amendment fee.

CB Richard Ellis is a Los Angeles-based commercial real estate services firm.

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