AmeriCredit Corp. amended and extended its master warehouse credit facility.
The amendment, approved by all 10 active lenders in the facility, reduced the facility's size to $1.11 billion from $2.25 billion, and extended the revolving period to March 2010 from October 2009.
The firm also amended certain covenants under the facility such increasing the maximum rolling six-month annualized portfolio net loss ratio to 10% through October 2009, 12% through December 2009, 12.25% through March 2010 and 12% thereafter.
It also removed the 364-day aging limitation on pledged receivables and lowered the minimum interest coverage requirement to 1.05X earnings before interest, taxes, depreciation and amortization, except for the September 2009, December 2009 and March 2010 quarters, which will be at 0.75X.
Aside from the amendment, the advance rate on the master warehouse facility will immediately drop from around 85% to roughly 80% and will gradually decrease to approximately 68% by February 2010. The fully drawn cost of funds will rise by about 700 basis points.
The auto company also changed the covenant related to the rolling six-month annualized portfolio net loss ratio included in its $750 million medium term note facility, which enters an amortization period in October 2009, to levels that are consistent with changes in the master warehouse credit facility.Subsequent to these amendments, the firm is in compliance with all warehouse covenants.