Image Ups Credit Limit14 May, 2008 By: Erik Gruenwedel
Image Entertainment Inc. May 14 said it amended its three-year loan agreement with Wachovia Capital Finance Corp. from $15 million to $20 million.
In a sign of the current global credit crunch, future borrowing from the loan agreement would include increased interest charges from the Prime rate plus 0.25% to 0.75% or the Eurodollar rate plus 2.75%, up from 2.25%.
The agreement also lowers from $5 million to $3.5 million the fixed charge coverage ratio — a ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases.
“We believe this amendment indicates Wachovia' confidence in Image's new leadership and its ability to execute on its fiscal 2009 business plan,” said CFO Jeff Framer in a statement.