Regent Communications says in an SEC filing that it is still negotiating with Bank of America and other parties to its credit agreement. Nevertheless, BofA, as administrative agent for the lenders, has notified Regent of a covenant default and imposed an interest penalty adding two percentage points to the rate on its bank loans.
Regent reported in early April that it had received notification from BofA that it was in technical default of its loan agreements because its annual audited financials included a notation that there was doubt about Regent’s ability to continue as a going concern. At that time the bank reserved its full rights, including the right to call the loan.
That has not happened. Regent doesn’t have to come up with $195 million in cash. But it will have to make higher interest payments on those outstanding loans. The latest letter to Regent from BofA as administrative agent for the lenders invokes a requirement that the borrower to make the “default interest” payments specified in the loan agreements – the specified rate plus and additional two percentage points.
Regent noted in its SEC filing that it is continuing to negotiate with its lenders to try to amend the financial ratios and other covenants in its credit agreement so it can return to compliance.