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Huntsman concludes credit agreement waiver
17
Apr '09
Huntsman International LLC, a wholly owned subsidiary of Huntsman Corporation announced it has entered into a credit agreement waiver with the lenders of its $650 million revolving credit facility. The waiver relaxes the senior secured leverage ratio covenant from 3.75 to 1.00 to 5.00 to 1.00 for the period measured June 30, 2009 through June 30, 2010.

The waiver, among other things, also modifies the definition of Consolidated EBITDA and permits Huntsman International LLC to add back any lost profits attributable to Hurricanes Gustav and Ike that occurred in 2008. Additionally, the amount of Permitted Non-Cash Impairment and Restructuring Charges was increased from $100 million to $200 million.

As an incentive to the lenders to agree to these changes, Huntsman offered a payment of 50 basis points to consenting lenders. In addition the LIBOR spread on borrowed funds under the revolving credit facility increased to 400 basis points. There are currently no borrowings under this facility. Among other things, Huntsman also agreed not to make aggregate restricted payments greater than $100 million plus Available Equity Proceeds.

Kimo Esplin, its CFO, stated: “We were fully compliant with our financial covenants, but as we looked forward and considered the possibility of a longer than anticipated global recession, we felt it prudent to take action now to obtain greater flexibility under our covenants.”

He added, “By obtaining this waiver, we preserve our ability to freely access the $650 million revolver in addition to available cash to meet the needs of our business, even if the economy's recovery from the present downturn takes longer than expected. We finished our first quarter with liquidity in excess of $1 billion. We are pleased to have taken this step and others that put us in a position of financial strength as the world's economies begin to recover.”

Huntsman Corporation


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