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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Generali | AQEU:GM | Aquis Europe | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.24 | 1.07% | 22.68 | 22.66 | 22.67 | 22.68 | 22.485 | 22.51 | 145,559 | 16:50:12 |
Lenders to American Axle & Manufacturing Holdings Inc. (AXL) have agreed to an amendment and waiver on its revolving credit facility, giving the company until the end of the month to meet terms on the debt.
The loan was previously renegotiated last November, and the latest waiver runs through July 30, the company said in a Securities and Exchange Commission filing Tuesday.
During the waiver period, the firm must maintain daily minimum liquidity of $100 million, according to the filing. It is also limited in its ability to incur or repay debt, make restricted payments and make investments.
American Axle, which makes axles for General Motors Corp. (GMGMQ), had about $280 million of liquidity, consisting of available cash, short-term investments and committed borrowing capacity on its revolver, according to the filing.
JPMorgan Securities Inc. and Banc of America Securities LLC are lead arrangers on the loan. Justin Perras, a spokesman for JPMorgan declined to comment. Banc Of America spokeswoman Louise Hennessy also declined to comment. Lenders were paid a 25 basis points fee to agree the waiver.
Chris Son, a spokesman for American Axle, did not comment further on the amendment and waiver.
The borrowing capacity under the revolver stands at $476.9 million through April 2010 and at $369.4 million through December 2011, according to Standard & Poor's LCD unit. As at the end of March, American Axle had $174.7 million available under the revolver, according to LCD.
The company previously amended the revolver in November, extending the maturity of a portion of the facility to December 2011 from April 2010.
It was in compliance with covenants on the revolver at the end of March, but auditors warned that the company might not be able to continue as a going concern.
Lenders to American Axle include Wachovia, BNP Paribas, KeyBank, SunTrust, Bank of China, HSBC, Commerzbank, U.S. Bank, Comerica Bank, National City Bank, Bank of Tokyo-Mitsubishi, Bank of Nova Scotia, Bank of New York Mellon and Merrill Lynch Bank, according to the filing.
American Axle relies on GM for about 75% of its revenue. The company continues to be rocked as GM, which filed for bankruptcy protection June 1, slices production amid a worldwide recession that has pushed auto sales to historic lows.
JPMorgan analysts Himanshu Patel and Ryan Brinkman believe bankruptcy for American Axle is possible, if not imminent. In a note to clients Monday, the analysts listed three possibilities for the company: covenant extensions, aid from General Motors and American Axle Chief Executive Dick Dauch fighting to avoid Chapter 11.
Kip Penniman, an analyst at KDP Investment advisors, believes it is unlikely that the company will pay the upcoming coupons due August 11 and September 1 on its bonds. This would result in a default, Penniman said in a note to clients Tuesday.
"From today's vantage point, it appears unlikely that Axle will pay its bond coupons due on 8/11 and 9/1 and we expect the company will file for bankruptcy," Penniman wrote.
Penniman estimates that if American Axle were to file for a traditional Chapter 11 bankruptcy, unsecured bondholders could recover anything from 18 cents to 41 cents on the dollar, with the recoveries paid in the form of equity in the reorganized entity. Bondholders could recover around 40 cents on the dollar in a pre-packaged bankruptcy, representing a majority stake in the equity of the reorganized entity, Penniman said.
The company has about $1.1 billion of debt on its balance sheet and about $770 million of retiree-related liabilities as at the end of December 2008, according to Penniman.
American Axle's waiver comes as Lear Corp. (LEAR), a maker of automotive seats and electronics, became the latest supplier to file for bankruptcy protection.
Eight major suppliers have filed for bankruptcy, including big names such as Delphi Corp. (DPHIQ) and Collins & Aikman Corp. The number increases to more than a dozen when expanded to smaller or privately owned suppliers.
American Axle's 5.25% bonds due 2014 were lower in light trade Tuesday, according to online trading platform MarketAxess, which is showing quotes at 28 cents on the dollar.
The company's shares were recently down 51 cents, or 18%, at $2.33.
Son, the company's spokesman, indicated that it expects to announce its second-quarter earnings at the end of July.
-By Kate Haywood, Dow Jones Newswires; 212-416-2218; kate.haywood@dowjones.com
(Jeff Bennett in Detroit and Geoffrey Rogow contributed to this report.)
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