Doughnut chain Krispy Kreme Doughnuts Inc. said Wednesday it obtained amendments to its secured credit facilities which raise the interest rate and relax certain financial covenants.
The interest rate on the outstanding loans is now LIBOR plus 5.5 percent, up from LIBOR plus 3.5 percent. LIBOR, or the London interbank loan rate, is the rate at which banks borrow funds from each other.
Fees on letters of credit outstanding under the facilities will increase to 5.75 percent from 3.75 percent, Krispy Kreme said.
As of Feb. 3, the outstanding balance of the term loan was $76.1 million and outstanding letters of credit were $20.3 million.
The company said the covenants previously were scheduled to become more stringent during fiscal 2009.
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