Georgia Gulf amends loan, permitting non-payment of interest on notes

By Sara Rosenberg

New York, June 15 - Georgia Gulf Corp. amended its senior secured credit facility, allowing for the withholding of note interest payments, according to a news release.

Under the amendment, the company can to continue to withhold the $34.5 million of interest payments due April 15 on its 2014 senior notes and 2016 senior subordinated notes and to withhold the $3.6 million interest payment due June 15 on its 2013 senior notes.

The non-payment of interest will not constitute an event of default until the earlier of July 15 or the first day holders of 25% or more of its 2013 senior notes, 2014 senior notes, or 2016 senior subordinated notes have the right to accelerate the debt.

As a result of the amendment, the company can't issue second-lien notes as currently contemplated by exchange offers without further bank approval.

The amendment also revised the definition of consolidated net income to exclude any gain or loss in respect of the modification or exchange of debt instruments and any cancellation of debt income arising from the cancellation of debt pursuant to an exchange offer. This allows the company to exclude the $121 million non-cash gain on the substantial modification of the term loan B recorded in its statement of operations for the three months ended March 31 from consolidated net income for purposes of determining covenant compliance.

Georgia Gulf is an Atlanta-based manufacturer and marketer of chlorovinyls and aromatics chemicals, and vinyl-based building and home improvement products.

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