Tenneco Wins Covenant Changes, Renewal Of Facility

   DOW JONES NEWSWIRES 
 

Tenneco Inc. (TEN) won changes in the financial covenant ratios on its senior secured credit facility from its senior lenders and renewed its U.S. securitization facility as it looks to navigate the woes facing the global auto industry.

Auto suppliers such as Tenneco are in a precarious spot as U.S. auto makers pare swollen inventories, particularly in North America. Earlier this month, Tenneco, which makes shock absorbers, suspensions and manifolds, said its fourth-quarter net loss widened amid restructuring charges.

Last week, Moody's Investors Services lowered its credit ratings on the company to the verge of highly speculative territory, citing the potential for further erosion of the auto-parts maker's credit metrics amid the dramatic deterioration in global automotive production levels.

The covenant changes begin with first quarter of this year and continue through the second quarter of 2011. The compliance ratios the company must meet are a maximum leverage ratio and a minimum interest coverage ratio. Fees and amendment costs under Monday's amendments are expected to total $8 million.

Tenneco also said it renewed its U.S. securitization facility in the amount of $100 million through Feb. 22, 2010. The company's limit for securitizing receivables under its credit facilities is $250 million.

Tenneco's shares closed Monday at $1.20, down 5.5%, and were unchanged in after-hours trading.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; [e-mail]