Theragenics (TGX) Enters Into New Unsecured Credit Agreement

May 28, 2009 9:16 AM EDT

Theragenics Corporation (NYSE: TGX) today announced that it has entered into a new unsecured credit agreement with Wachovia Bank, National Association. Wachovia is a Wells Fargo company. The new credit agreement consists of a $30 million revolving credit facility and a $10 million term loan. Maximum borrowings under the revolving credit facility can be increased to $40 million under an accordion feature. This new credit agreement replaces and refinances the $40 million revolving credit facility with Wachovia that was set to expire in October 2009. Borrowings of $32 million were outstanding under the old credit facility. The financial covenants in the new credit agreement are substantially similar to the previous credit agreement, except that the requirement to maintain at least $20 million in liquid assets has been reduced to $10 million.

Under the new credit agreement, the $30 million revolving line of credit matures on October 31, 2012, with interest payable at LIBOR plus 2.25%. Subject to the approval of the bank, the maximum available borrowings under the revolving line of credit can be increased to $40 million under an accordion feature. $22 million is currently outstanding under this revolving line of credit. The $10 million term loan requires equal monthly principal payments plus interest at LIBOR plus 1.75% over three years, beginning July 1, 2009. The Company also entered into interest rate swaps to hedge the interest rate on the entire amount of the term loan and a portion of the revolving credit facility. The credit agreement is unsecured, but provides for a lien to be established on substantially all assets of the Company if certain events of default occur. Provisions of the new credit facility require the Company to maintain a minimum cash and investment balance, as defined in the agreement, of $10 million. The terms also require the maintenance of certain minimum financial covenants, including a minimum fixed charge coverage ratio and a maximum debt to tangible net worth.

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