Koor Industries Ltd. (TASE:KOR), a unit of IDB Holding Corp. Ltd. (TASE:IDBH), controlled by Nochi Dankner, has reached new and improved credit arrangements with Citigroup Inc. (NYSE: C) and Morgan Stanley (NYSE: MS) on the terms of its loan taken to finance the acquisition of shares in Credit Suisse Group AG (NYSE: CS; SWX: CSGN; XETRA: CSGZ). Koor secured a two-year extension on the terms, and was given the right to terminate or reduce the credit facility at any time, without payment, except during the first six months.
Most importantly, the new terms lower the floor price for Credit Suisse's share - the price at which Citigroup and Morgan Stanley have the right to demand immediate repayment of the loan - to CHF 11.26. In addition, the minimum credit rating for Credit Suisse - below which the banks have the right to demand immediate repayment of the loan - was lowered to Baa1 (Moody's) and BBB (S&P), from A2 and A+, respectively.
At Koor's request, taking into account its liquid assets, the total amount of the credit facility was reduced by depositing up to CHF 350 million of the amount in attached deposits in favor of the banks (CHF 175 million for each bank). When the amendment to the credit facility comes into effect (in December 2012 with Morgan Stanley, and in January 2013 with Citigroup), the balance of the debt (after deducting the attached deposits and CHF 37 million, which can be withdrawn immediately) will be CHF 304 million, against which the banks have a lien on 30.32 million Credit Suisse shares held by Koor.
Published by Globes [online], Israel business news - www.globes-online.com - on December 24, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012