Anthracite Capital misses interest payments, exchanges some debt

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Related Companies Anthracite Capital Inc. (AHR)

Related Documents 8-K Anthracite Capital Inc. 10/30/2009, filed on 11/3/2009

Related Articles 10/1/2009 Anthracite Capital misses payments on notes, secured facilities

Anthracite Capital Inc. did not make certain interest payments due Oct. 30, the company disclosed in a Form 8-K filed Nov. 3.

The company did not make interest payments on its outstanding $13.75 million aggregate principal amount of 7.22% senior notes due 2016, its outstanding $15 million aggregate principal amount of 7.772%-to-floating-rate senior notes due 2017, and its outstanding $37.5 million aggregate principal amount of 8.1275%-to-floating-rate senior notes due 2017.

Under the notes' indentures, the failure to make an interest payment is subject to a 30-day cure period before constituting an event of default, the filing said.

Anthracite said it has made an arrangement with noteholders Kodiak CDO I Ltd., Kodiak CDO II Ltd., Attentus CDO III Ltd. and Taberna Preferred Funding IX Ltd. in which it agreed to issue unsecured senior notes in exchange for $64.5 million aggregate principal amount of unsecured senior notes.

Anthracite issued $43.5 million aggregate principal amount of new unsecured senior notes in exchange for about $36.3 million aggregate principal amount of its 7.22% senior notes due 2016; $7.5 million aggregate principal amount of new unsecured senior notes in exchange for about $6.3 million aggregate principal amount of its 7.20% senior notes due 2016; and $26.4 million aggregate principal amount of new unsecured senior notes in exchange for $22 million aggregate principal amount of its 7.772%-to-floating-rate senior notes due 2017.

The new notes bear a fixed interest rate of 1.25% per year in a modification period which ends either Oct. 30, 2013, or when other conditions related to the company's credit facilities are met, whichever comes first. After the modification period, the notes bear interest at the same rates as the securities for which they were exchanged. During the modification period, the company is subject to limitations on dividends and new debt, and the cure period for a default in the payment of interest is three days.

Also on Oct. 30, according to the filing, Anthracite made the interest payment originally due Sept. 30 on the outstanding $18.75 million aggregate principal amount of its 7.20% senior notes due 2016. Additionally, in connection with the exchange of about $6.3 million aggregate principal amount of the 7.20% notes, the interest payment originally due Sept. 30 for those 7.20% notes was satisfied by payment at the new lower rate of 1.25% per year on the increased principal amount.