Covenant Transportation Group extends, amends revolving credit facility

user-gravatar

Covenant Truck

Covenant Transportation Group Inc. on Tuesday, Sept. 7, announced the extension and amendment of its $85 million revolving credit facility with Bank of America and J.P. Morgan as of Aug. 31. The maturity date was extended by three years to September 2014. In addition, the pricing grid was amended to eliminate the LIBOR floor on the company’s interest rate grid, reduce the applicable margin for base rate and LIBOR borrowings across all levels of the grid and reduce the company’s unused line fees, with an effective date of Aug. 1 for the new rates.

The company says that based on its $44.6 million of availability under the facility at June 30, the effective interest rate on outstanding borrowings would have been reduced by 245 basis points, the letter of credit fees would have been reduced by 125 basis points, and the unused line fees would have been reduced by 25 basis points under the amended facility.

“We appreciate the expression of confidence and support from our lenders,” says David R. Parker, chairman, president and chief executive officer. “Our sole financial covenant did not change in the amendment, and based on our financial and operating expectations, we expect to comply with the applicable financial covenant for the foreseeable future.”

Covenant Transportation Group is the holding company for several transportation providers, including operations from Covenant Transport and Covenant Transport Solutions of Chattanooga, Tenn.; Southern Refrigerated Transport of Texarkana, Ark.; and Star Transportation of Nashville, Tenn.