Haights Cross defaults on term loans; interest on $100 million loan increased to 11.36%

By Caroline Salls

Pittsburgh, June 25 - Haights Cross Communications, Inc. received a notice of default on its $100 million senior secured term loan agreement and its $30 million senior secured term loan agreement in connection with the delayed filing of its 10-K for the year ended Dec. 31 and its 10-Q for the quarter ended March 31, according to an 8-K filed with the Securities and Exchange Commission.

The company has 60 days to cure the default under the term loan agreements.

In addition to the default notice, Haights Cross said the interest rate on the outstanding balance under the first term loan increased to 11.36% from 9.86% as a result of the delayed filings.

The company said the higher interest rate will remain in effect until one business day after the financial information is filed.

According to the filing, any acceleration of payment on the loans would also constitute an event of default under the company's $30 million senior secured revolving credit facility, which has never been drawn, and the indentures for its 11¾% senior notes due 2011 and its 12½% senior discount notes due 2011.

As of June 22, Haights Cross said it had $96.3 million outstanding under the first term loan agreement and $29.3 million under the second term loan agreement.

Also as of June 22, there was zero outstanding under the revolver, $111.1 million under the 12½% notes and $170 million under the 11¾% notes.

As previously reported, the 10-K filing is delayed because the company needs to complete work on a restatement of its financial statement, which it has completed, and because of the need to further investigate a disagreement with one of its directors over Haights Cross' proposed compensation analysis to be included in the 10-K.

Haights Cross is a White Plains, N.Y.-based publisher of books for the education and library markets.

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