National Consumer Cooperative Bank in Washington said Tuesday that its lenders had waived financial requirements on a credit line for 90 days in exchange for a higher interest rate.
The $2.2 billion-asset company, which does business as NCB, also said it cannot access the revolving credit line again until reaching a further agreement with the lenders.
Lenders led by SunTrust Banks Inc. increased the rate by 200 basis points, to 5.5 percentage points more than the London interbank offered rate, according to a regulatory filing by NCB.
Three-month Libor was 42.5 basis points on Tuesday.
NCB will not be bound by its leverage and fixed-charge coverage ratio covenants or the net-worth requirements on its credit line until Nov. 16, the filing said.
The $225 million line was arranged in 2006 and matures in December 2010, according to data compiled by Bloomberg. NCB owed $165 million on the loan as of Aug. 12, the filing said.
Member-owned NCB said it defaulted on the loan after it had to boost its loan-loss provision and chargeoffs because some of its borrowers are struggling.
Lenders to NCB got a 25-basis-point fee for the agreement and mandated the company have a minimum of $60 million in cash throughout the forbearance period.