For our next distressed debt example, I present to you (with the help of a friend) Blockbuster's bank debt (currently quoted 69-70).
- Rate set to LIBOR plus 10.00% (3.50% LIBOR floor)
- Maturity date extended to September 30th, 2010
- Size set to $250M (from $325M) with $52.5M available for LCs
- Amortization Schedule Set: December 15th, 2009: $25M, January 31st, 2010: $20M, February 28th, 2010: $20M, March 31st, 2010: $20M, April 30th, 2010: $10M, May 31st, 2010: $15M, June 30th, 2010: $50M, July 31st, 2010: $10M, August 31st, 2010: $10M
- 50% Excess Cash Flow Sweep established, Fixed Charge Coverage Ratio set to 1.25x up to January 3, 2010 and 1.30x thereafter
- Leverage Ratio amended to 2.75x (previously 3.00x)
- $30M Capex covenant in 2009 and $40M in 2010 (with a $10M carryover option); this is in-line with maintenance capex for the company.
- Removes “Going-Concern” default language resulting from FY2008 Auditor’s Opinion