CB Richard Ellis (CBG) Amends Credit Agreement With Lenders

March 24, 2009 4:59 PM EDT

CB Richard Ellis Group, Inc. (NYSE: CBG) announced that the lenders under its credit agreement have agreed to amend certain of its terms. The changes will give the Company considerably increased financial flexibility to navigate through a weaker market environment.

The amendment allows for:

• a higher maximum leverage ratio
  
• a lower minimum interest coverage ratio
  
• modifications to the calculation of EBITDA for financial covenant purposes
  
• the ability to buy back Term Loans at less than par, subject to certain restrictions
  
• the ability to have subordinated debt be excluded from total debt for covenant purposes if the proceeds are used to prepay existing debt, subject to certain restrictions
  
• the ability to establish a receivables financing facility; and
  
• the ability to make future loan modification offers to holders of existing tranches of debt.
  

Under the newly amended credit agreement, the Company’s maximum leverage ratio (total debt less available cash to covenant EBITDA ratio) has been increased to 4.25x from 3.75x through March 31, 2011. The Company’s minimum interest coverage ratio (covenant EBITDA to interest expense ratio) has been reduced to 2.00x from 2.25x through March 31, 2011.

As part of the negotiations with its lenders, the Company has modified certain terms on its existing loans. The Company expects the resulting overall interest expense on debt under its credit agreement in 2009 to be in line with 2008 levels, although higher than it would have been without the amendment.[SM]

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