By Jeremiah McWilliams
ST. LOUIS POST-DISPATCH

Furniture Brands International Inc. has reached agreements with lenders and note-holders to give it more than a month of breathing room on some debt and credit arrangements.

But in exchange for relief running through Aug. 14, the Clayton-based seller of Lane and Broyhill furniture will have to prepay an estimated $164.7 million in principal and interest on some bonds.


The required payout will slash earnings by 15 cents per share over the next two quarters, the company said in a filing with the Securities and Exchange Commission.

Furniture Brands already projected a loss and falling sales in the current quarter.

Earlier this year, the company warned that it probably would violate some conditions attached to a $150 million note and a $400 million credit line. In April, Furniture Brands negotiated amendments to temporarily loosen the restrictions.

Those amendments were set to expire June 29.

On that day, various lenders agreed for a second time to waive certain restrictions embedded in the $400 million credit line. The waiver, which expires Aug. 15, temporarily frees Furniture Brands from restrictions on how much debt and combined interest and rent expenses it may carry.

Similarly for the $150 million note, the company will be allowed to have a higher debt-to-earnings ratio.

The waiver came a week after Furniture Brands signed a letter that could give it a $600 million line of credit through J.P. Morgan Securities Inc. and JPMorgan Chase Bank N.A. Furniture Brands said it would use the money to refinance its credit line, to repay the senior notes and for “general corporate purposes.”

The company’s accounts receivable, inventory and deposit accounts would be collateral. The deal is not yet complete.

jmcwilliams@post-dispatch.com | 314-340-8372