Blount Reduces Line of Credit from $90 Million to $60 Million

Blount International Inc. on Monday said it has reduced the size of the company’s borrowing capacity.

The Portland-based manufacturer of outdoor products such as saw chains and lawn mower blades reached a deal with lenders to reduce the amount available in its revolving credit facility from $90 million to $60 million.

It arrangement also extends the maturity dates from August 2010 to February 2012 for a majority of the funds available under the credit facility.

The terms also include an increased interest rate applicable to 96 percent of the $107.5 million of term loans outstanding. About $4 million of the existing loans will retain the August 2010 maturity date.

Blount has about $48 million of its $60 million in borrowing capacity available and $58 million of cash on hand.

In a statement, Chief Financial Officer Calvin E. Jenness said the restated credit facility, joined with Blount’s ongoing cash flow, gives the company adequate liquidity to execute business plans in the next two years.

General Electric Capital Corp. served as the administrative agent in amending the credit arrangement.

SEC FORM 8-K    -    ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

“On December 4, 2009, Blount International, Inc. ("Blount" or the "Company"), entered into an amendment and restatement (the "Amendment and Restatement") to Blount's Amended and Restated Credit Agreement, dated as of August 9, 2004, pursuant to which General Electric Capital Corporation acts as administrative agent (the "Credit Agreement").

The Amendment and Restatement, among other things, extends the maturity date of Blount's revolving credit facility and term loans from August 9, 2010 to February 9, 2012 and reduces the size of the revolving credit facility from $90 million to $60 million.

The Company reduced the size of the revolving credit facility to better align borrowing capacity with working capital needs and minimize future costs related to undrawn amounts. The Amendment and Restatement also increases the interest rate of the term loans from LIBOR plus 1.75% to LIBOR plus 3.50% and establishes a minimum interest rate of 5.50% on the portion of the term loans covered by the Amendment and Restatement.

The terms of existing term loans amounting to $3.9 million of the total $107.5 million term loan principal outstanding will not be amended and remain unchanged, including interest at LIBOR plus 1.75% and a maturity date of August 9, 2010. The Company may also elect certain defined index interest rates under the term loan facility which are not expected to be lower than the LIBOR-based rates described above. The Amendment and Restatement also increased the maximum allowed Leverage Ratio, as defined in the Credit Agreement, from 4.25 to 4.50.”