Wabash National Corporation (NYSE: WNC) has entered into a 60-day extension of a forbearance agreement originally executed as of April 28, regarding its revolving credit facility.
The company’s bank group has agreed to continue to refrain from accelerating maturity of the credit facility due to existing events of default. The extension agreement also provides additional liquidity to the company by reducing a borrowing availability reserve from $22.5 million to $17.5 million.
Among other provisions, the extension agreement increases the interest rate on each of prime rate-based borrowings and LIBOR-based borrowings by fifty basis points to prime plus 2.75 and LIBOR plus 4.25, respectively, and reduces borrowing availability on eligible accounts receivable from 90% to 85%. The company expects to continue negotiations with its bank group regarding the terms of a comprehensive amendment to the revolving facility during the extended forbearance period.
“We are pleased with the continuing support provided by our bank group during this period of economic uncertainty,” Wabash National Corporation President and CEO Dick Giromini said. “Extending the forbearance agreement provides additional time to reach a satisfactory resolution with the banks as it relates to our longer-term capital requirements. We have made good progress with our evaluation of potential strategic alternatives and we will use this extension to continue to drive the process to a conclusion and to put in place a capital structure that meets the needs of the company during this economic downturn.”