Dana Holding has said it has secured an amended credit facility in a deal which the supplier group says will provide it with strategic flexibility. The company also said it had obtained permission to dispose of some non-core assets.

In a statement, Dana Holding said it had received the requisite support of its lenders to amend the financial covenants for its US$1.3 billion senior secured term credit facility.

"The amendment improves the ratios permissible for leverage and interest coverage," the company said. It covers the company's financial covenants for each fiscal quarter through 2012. 

Dana also said that it had received permission to dispose of certain non-core businesses and issue additional debt outside the US.

"These amendments will provide Dana with greater flexibility as it considers strategic options and implements its restructuring plans, the statement claimed.

In connection with the amendment of its term credit facility, Dana has agreed to pay an amendment fee and increase the annual base interest rate by 50 basis points per annum and will repay $150m of outstanding principal under the term credit facility.

As of 31 October 2008, the company had approximately $1 billion in unrestricted cash.

"As we reported during our recent third-quarter earnings announcement, tumultuous industry conditions and our resulting outlook for the balance of the year suggested that the renegotiation of our loan covenants was prudent," said Dana executive vice president and CFO Jim Yost. "These modifications position us to be in compliance with our key financial covenants going forward and provide the flexibility needed to achieve our strategic imperatives."

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