MNC extends talks for line of credit

THE BALTIMORE EVENING SUN

MNC Financial Inc., the parent company of Maryland National Bank, announced today that it is continuing negotiations with its syndicate of banks, headed by Morgan Guaranty Trust Co., on the terms of a $750 million credit line.

The announcement comes two days after a Dec. 14 deadline that had been set to come up with a new arrangement. No new deadline has been released by MNC. Morgan officials were not available for comment.

MNC needs the line of credit from Morgan to continue to pay its bills and to meet debt obligations that are coming due soon.

Under a Sept. 28 agreement with Morgan, $600 million of the line of credit was made immediately available to MNC to replace maturing short-term borrowings and commercial paper.

On Dec. 10, MNC announced that it had received an extension until Dec. 14 to meet various requirements. One of the key requirements is for the company to boost its liquidity, which is the amount of cash and marketable securities that are available to a company.

Under the agreement, MNC was supposed to have additional cumulative liquidity of $300 million as of last Dec. 10. Additional liquidity is supposed to reach $575 million by Jan. 5 and $650 million by Jan. 26.

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