May 18, 2009 / 1:13 PM / 10 years ago

UPDATE 2-Anthracite amends credit facilities, shares soar

* Extends revolving period to Sept. 30, 2010

* Eliminates all mark-to-market provisions

* Shares jump 88 percent (Updates with analyst comments, adds details)

By Archana Shankar

BANGALORE May 18 (Reuters) - Anthracite Capital Inc AHR.N said it amended $365 million of secured credit facilities, extending their maturities to Sept. 30, 2010, and eliminating all mark-to-market provisions, sending its shares up 88 percent.

“The amendment is a near-term positive for them as it gives them some breathing room. The market was concerned that if they didn’t extend the lines they would have to wind up the company,” analyst Bose George of Keefe, Bruyette & Woods told Reuters.

However, George does not expect to see much improvement for the company until 2010.

The specialty finance company, which received waivers on its covenant breaches twice, had said it would default if it failed to obtain extensions of the waivers from its lenders by May 15. [ID:nBNG484509]

With the amendment, the new interest rate on the facilities will be the greater of 30-day LIBOR plus 3.5 percent or 5.5 percent, the company said.

The outstanding balances under the facilities on May 15 stood at $148.6 million with Bank of America, $70.8 million with Deutsche Bank and $145.9 million with Morgan Stanley.

Anthracite, which is externally managed by a subsidiary of BlackRock Inc (BLK.N), also said the waiver of covenant breach under its secured credit facility with BlackRock Holdco 2 has been extended for 30 days to June 15, 2009.

The analyst said the $60 million credit line was set up by Blackrock last year when the company had difficulty meeting margin calls. Shares of the company, which have lost more than 90 percent of their value over the past year, were up 59 cents at $1.28 on the New York Stock Exchange.

Reporting by Archana Shankar in Bangalore; Editing by Mike Miller and Anil D'Silva

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