Horizon Lines Successfully Amends Credit Agreement

Friday, March 11, 2011

Horizon Lines, Inc. (NYSE: HRZ) today announced that it has entered into a credit agreement amendment with its lender group, effective March 9, 2011, providing the company with additional flexibility as it moves forward with its overall debt refinancing efforts.

The amendment waives a default under the senior credit facility that would have arisen from the $45 million fine that the company has agreed to pay to settle the Department of Justice investigation, upon acceptance of the Plea Agreement by the United States District Court for the District of Puerto Rico. The amendment also adjusts the two financial covenants of the credit facility, providing relief from potential noncompliance under those covenants.

"We very much appreciate the support of our lender group and recognize that the amended credit agreement is a vote of confidence in the future of our company," said Michael T. Avara, Executive Vice President and Chief Financial Officer. “This amendment allows Horizon Lines to effect the Plea Agreement with the Department of Justice without triggering a judgment default under the credit facility, and it provides additional financial covenant flexibility as we pursue a comprehensive refinancing of our existing capital structure.”

As consideration for the amendment and waiver, Horizon Lines has agreed to a pricing increase of 2.50% per annum under the credit facility, an amendment fee of $0.5 million, as well as a reduction in the letter of credit commitment from $50 million to $20 million and in the swingline commitment from $20 million to $5 million. Horizon Lines also has agreed to other changes in the credit facility, including, but not limited to, an agreement not to issue a dividend, and certain reporting obligations. A copy of the credit agreement amendment is included as an exhibit to a current report on Form 8-K that Horizon Lines is filing with the SEC on March 11, 2011.

“This credit agreement amendment represents another significant step towards a comprehensive refinancing of our capital structure,” said Charles. G. Raymond, Chairman, President and Chief Executive Officer. “It is the fruition of much hard work and I commend both our lender group and the Horizon management team for their collaboration in delivering this amendment in a timely manner.”

Stephen H. Fraser, incoming President and Chief Executive Officer, stated: “Together with our advisors, we expect to soon commence broader constructive refinancing discussions. We are confident that these discussions will result in a financially stronger company that is better-positioned for the long-term. We anticipate completing the refinancing process in the second or third quarter of 2011.”

 

Source: Horizon Lines

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Houston Ship Channel Man Overboard Swims to Island

The U.S. Coast Guard informs of the rescue of a 62-year-old man who was stranded on Atkinson Island, after he fell off his boat in the Houston Ship Channel near Sylvan Beach and swam to the island.

RS to Exhibit at SMM 2014

Russian Maritime Register of Shipping (RS) announced it will exhibit at Shipbuilding, Machinery and Marine Technology (SMM) International Trade Fair September 9-12, 2014 in Hamburg, Germany.

Green Marine, ACPA Partner to Reduce Environmental Footprint

Green Marine and the Association of Canadian Port Authorities (ACPA) have entered into a Memorandum of Understanding with the goal of jointly expanding efforts

 
 
Maritime Careers / Shipboard Positions Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1762 sec (6 req/sec)