US domestic trades shipping company Horizon Lines revised its credit facilities, allowing it borrow substantially more.The company says: “The primary components of the amendment to the senior credit facility include: 1) increasing the revolving credit facility by US$25m to US$75m; 2) increasing the additional term loan borrowing availability by US$25m to US$75m; 3) raising the annual capital spending limit to US$40m, exclusive of vessel and equipment lease buyouts; 4) allowing for 100% carryover of unutilized permitted annual capital spending; 5) increasing maximum restricted payments on a rolling four quarters basis from US$15m to US$36m; 6) providing 100% credit for voluntary loan prepayments on the required annual excess cash flow sweep now commencing in 2007; and 7) increasing permitted acquisitions from US$30m to US$120m annually and from US$100m to US$200m over the life of the facility. The pre-amendment senior credit facility consisted of a US$250m term loan and a US$50m revolving credit facility.”
"This amendment [to its senior credit facility] provides Horizon Lines with the greater flexibility to meet its future growth needs in a cost effective manner," said Mark Urbania, Senior Vice President and Chief Financial Officer. "The amendment also serves as recognition of Horizon Lines' improved credit standing brought about by the significant de-leveraging achieved since Horizon Lines' initial public offering in September 2005 through both earnings growth and debt prepayments. We plan to continue to de-leverage in the future via both debt prepayments and earnings growth."