Building Materials Holding Corp. (BMHC), which defaulted on one of its loans at the end of July, has secured a temporary waiver of certain covenants from its lender. The waiver, announced late on Friday, allows the San Francisco pro dealer to borrow up to $60 million through Sept. 30 while it seeks to permanently change the terms of its credit facility to better reflect market conditions.
As of July 28, 2008, the company had $29 million outstanding on a revolving loan and $340 million on a term loan.
BMHC announced on July 29 that, based on preliminary second-quarter results, the company was out of compliance with financial covenants relating to minimum net worth and minimum earnings before interest, tax, depreciation and amortization. As a result, the lenders under the credit facility had the option to stop further borrowings and require BMHC to repay borrowed amounts immediately.
The company said it is in still the process of finalizing its financial statements for the second quarter of 2008. These results are scheduled to be released on Aug. 14.