Nevada
|
000-24960
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88-0320154
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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400
Birmingham Hwy., Chattanooga, TN
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37419
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(Address
of principal executive offices)
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(Zip
Code)
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[ ]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
[ ]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
[ ]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive Agreement.
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On
September 23, 2008, Covenant Transport, Inc., a Tennessee corporation
("CTI"), CTG Leasing Company, a Nevada corporation ("CTGL"), Covenant
Asset Management, a Nevada corporation ("CAM"), Southern Refrigerated
Transport, Inc., an Arkansas corporation ("SRT"), Covenant Transport
Solutions, Inc., a Nevada corporation ("CTS"), Star Transportation, Inc.,
a Tennessee corporation ("Star"; and collectively with CTI, CTGL, CAM,
SRT, and CTS, the "Borrowers"; and each of which is a direct or indirect
wholly-owned subsidiary of Covenant Transportation Group, Inc., a Nevada
corporation (formerly known as Covenant Transport, Inc., and herein
referred to as, the "Company")), and the Company entered into a Third
Amended and Restated Credit Agreement with Bank of America, N.A., as agent
(the "Agent"), JPMorgan Chase Bank, N.A. ("JPM"), and Textron Financial
Corporation ("Textron"; and collectively with the Agent, and JPM, the
"Lenders") that matures September 23, 2011 (the "Credit Agreement"). The
Credit Agreement takes the place of that certain Second Amended and
Restated Credit Agreement with the Agent and other lenders, originally
entered into on December 21, 2006, as subsequently amended, which was
scheduled to mature December 20, 2011. Contemporaneously with
the funding of the Credit Agreement, the Company, using a portion of the
proceeds from the Credit Agreement, paid off the obligations of its
wholly-owned subsidiary, CVTI Receivables Corp., a Nevada corporation,
under its accounts receivable securitized loan facility with Three Pillars
Funding LLC and SunTrust Robinson Humphrey, Inc., and terminated the
SunTrust securitization facility.
The
Credit Agreement is structured as an $85.0 million revolving credit
facility, with an accordion feature that, so long as no event of default
exists, allows the Borrowers to request an increase in the revolving
credit facility of up to $50.0 million. Borrowings under the
Credit Agreement are classified as either "base rate loans" or "LIBOR
loans". Base rate loans accrue interest at a base rate equal to
the Agent's prime rate plus an applicable margin that is adjusted
quarterly between 0.625% and 1.375% based on average pricing availability.
LIBOR loans accrue interest at LIBOR plus an applicable margin that is
adjusted quarterly between 2.125% and 2.875% based on average pricing
availability. The Credit Agreement includes, within its $85.0 million
revolving credit facility, a letter of credit sub facility in an aggregate
amount of $85.0 million and a swing line sub facility in an aggregate
amount equal to the greater of $10.0 million or 10% of the Lenders'
aggregate commitments under the Credit Agreement from time to
time. An unused line fee that is adjusted quarterly between
0.25% and 0.375% is applied to the average daily amount by which the
Lenders' aggregate revolving commitments under the Credit Agreement exceed
the outstanding principal amount of revolver loans and the aggregate
undrawn amount of all outstanding letters of credit issued under the
Credit Agreement. The obligations of the Borrowers under the
Credit Agreement are guaranteed by the Company and secured by a pledge of
substantially all of the Borrowers' assets, with the notable exclusion of
any real estate or revenue equipment financed with purchase money debt,
including, without limitation, tractors financed through the Company's
$200.0 million line of credit from Daimler Truck
Financial.
Borrowings
under the Credit Agreement are subject to a borrowing base limited to the
lesser of (A) $85.0 million, minus the sum of the stated amount of all
outstanding letters of credit; or (B) the sum of (i) 85% of eligible
accounts receivable, plus (ii) the lesser of (a) 85% of the appraised net
orderly liquidation value of eligible revenue equipment, (b) 95% of the
net book value of eligible revenue equipment, or (c) 35% of the Lenders'
aggregate revolving commitments under the Credit Agreement, plus (iii) the
lesser of (a) $25.0 million or (b) 65% of the appraised fair market value
of eligible real estate. The borrowing base is limited by a
$15.0 million availability block, plus any other reserves as the
Agent may establish in its judgment. The Credit Agreement
contains a single financial covenant, which requires the Company to
maintain a consolidated fixed charge coverage ratio of at least 1.0 to
1.0.
The
Credit Agreement includes usual and customary events of default for a
facility of this nature and provides that, upon the occurrence and
continuation of an event of default, payment of all amounts payable under
the Credit Agreement may be accelerated, and the Lenders' commitments may
be terminated. The Credit Agreement contains certain
restrictions and covenants relating to, among other things, dividends,
liens, acquisitions and dispositions, affiliate transactions, and total
indebtedness.
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This
description of the Credit Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Credit
Agreement, which will be filed with the Company's Form 10-Q for the
quarter ending September 30, 2008.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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The
information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item
2.03.
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Item
7.01
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Regulation
FD Disclosure.
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On
September 29, 2008, the Company issued a press release announcing the
Credit Agreement. A copy of the press release is attached to
this report as Exhibit 99.
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits.
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EXHIBIT
NUMBER
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EXHIBIT
DESCRIPTION
|
|
Covenant
Transportation Group, Inc. press release announcing the Third Amended and
Restated Credit Agreement and Update on Third Quarter
Results.
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||
The
information contained in Items 7.01 and 9.01 and the exhibit hereto shall
not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by
reference in any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
The
information in the exhibit hereto contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act. Such statements are made based on the current beliefs
and expectations of the Company's management and are subject to
significant risks and uncertainties. Actual results or events may differ
from those anticipated by forward-looking statements. Please refer to the
last paragraph of the attached press release and various disclosures by
the Company in its press releases, stockholder reports, and filings with
the Securities and Exchange Commission for information concerning risks,
uncertainties, and other factors that may affect future
results.
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COVENANT
TRANSPORTATION GROUP, INC.
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||
Date:
September 29, 2008
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By:
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/s/ Richard B. Cribbs |
Richard
B. Cribbs
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||
Senior
Vice President and Chief Financial
Officer
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EXHIBIT
NUMBER
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EXHIBIT
DESCRIPTION
|
Covenant
Transportation Group, Inc. press release announcing the Third Amended and
Restated Credit Agreement and Update on Third Quarter
Results.
|