Richardson Electronics amends revolver to allow for full redemption of 7.75% convertibles

By Jennifer Chiou

New York, June 2 - Richardson Electronics, Ltd. entered into an amendment under its revolving credit agreement, allowing for the full redemption of its $19,517,000 of 7.75% convertible senior subordinated notes due 2011, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The company will redeem the notes on June 11 at par plus accrued interest up to but excluding the redemption date using proceeds from the revolver.

Richardson Electronics and certain subsidiaries entered into the amendment on May 28 with JPMorgan Bank, NA as administrative agent. The changes boost the commitment for the revolving credit facility to $40 million from $20 million.

The amendment also extends the termination date of the credit agreement to May 31, 2013 from Oct. 31, 2010. It additionally requires the company to maintain a leverage ratio of less than 2.5 to 1.0 at all times after March 1, 2008, the 8-K said.

The redemption of the convertibles is allowed as long as no default has occurred.

Remaining proceeds from the revolver will be used for general corporate purposes.

Law Debenture Trust Co. of New York is the trustee for the notes.

Richardson is a LaFox, Ill., electronics components distributor.

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