UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________________________________________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported):
June 30,
2008
_____________________________________________________________________
COVENANT
TRANSPORTATION GROUP, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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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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(423)
821-1212
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[ ]
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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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Daimler
Truck Financial $200 Million Secured Equipment Facility
On
June 30, 2008, Covenant Transportation Group, Inc., a Nevada corporation
(formerly known as Covenant Transport, Inc. and herein referred to as, the
"Company"), and Covenant Asset Management, Inc., a Nevada corporation and
one of the Company's subsidiaries (the "Borrower") (together with certain
other subsidiaries of the Company), secured a $200,000,000 line of credit
from Daimler Truck Financial (the "Daimler Financing"). The
Daimler Financing is secured by both new and used tractors and is
structured as a combination of retail installment contracts and TRAC
leases. Pricing for the Daimler Financing is at (i) the 60
month Treasury Rate plus 1.97% annually on new equipment financed through
retail installment contracts, and (ii) a rate of 6% annually on all used
equipment financed. Approximately $122,000,000 was funded under
the Daimler Financing at June 30, 2008.
Amendment
No. 2, Consent and Limited Waiver to Second Amended and Restated Credit
Agreement
Contemporaneously
with the funding of the Daimler Financing, the Company and the Borrower
(together with certain other subsidiaries of the Company), entered into
that certain Amendment No. 2, Consent and Limited Waiver to Second Amended
and Restated Credit Agreement ("Amendment No. 2") with Bank of America,
N.A., as administrative agent (the "Agent") and SunTrust Bank, National
City Bank, Branch Banking and Trust Company, First Tennessee Bank National
Association, LaSalle Bank National Association, Regions Bank, FSG Bank,
N.A., and Sovereign Bank (collectively, with the Agent, the "Lenders"),
which amends that certain Second Amended and Restated Credit Agreement,
dated December 21, 2006, by and among the Company, the Borrower, and the
Lenders, as amended (the "Credit Agreement").
Amendment
No. 2, among other things, (i) amends certain defined terms used in the
Credit Agreement, (ii) authorizes the Daimler Financing and releases
Agent's liens on any collateral securing the Daimler Financing, (iii)
reduces the maximum borrowing limit from $190,000,000 to $81,000,000, (iv)
limits the aggregate outstanding amount of revolving loans under the
Credit Agreement to $30,000,000, (v) fixes the letter of credit sublimit
under the Credit Agreement at the present level of $51,000,000 and grants
the Agent a security interest in a cash collateral account of $50,500,000
to secure outstanding standby letters of credit, and (vi) waives, for the
period commencing June 30, 2008 and ending August 29, 2008, any default or
event of default that may have otherwise occurred as a result of any
failure by the Company's consolidated group of companies to comply with a
leverage ratio contained in the Credit Agreement. After giving
effect to Amendment No. 2, borrowings under the Credit Agreement are
subject to a borrowing base limit of (i) 85% of the net orderly
liquidation value of any eligible revenue equipment as determined under an
appraisal prepared by Taylor & Martin, Inc. (the "Taylor & Martin
Appraisal"), plus (ii) 70% of the net book value of any eligible revenue
equipment that is not valued in the Taylor & Martin Appraisal, plus
(iii) the balance in the cash collateral account, less specified
types of unsecured indebtedness, and letters of credit.
The
obligations of the Borrower under the Credit Agreement continue to be
guaranteed by the Company and all of the Company's wholly-owned domestic
subsidiaries, except CVTI Receivables Corp., a Nevada corporation
(collectively, the "Guarantors"), and is secured by a pledge of certain of
the Guarantors' assets, excluding certain revenue equipment of the
Guarantors serving as collateral under the Daimler Financing.
The
foregoing summary of the terms and conditions of Amendment No. 2 does not
purport to be complete and is qualified in its entirety by reference to
the full text of Amendment No. 2, which will be filed with the Company's
Form 10-Q for the quarter ending June 30,
2008.
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Limited
Waiver to Loan Agreement Relating to Accounts Receivable
Securitization
On
July 7, 2008, the Company and CVTI Receivables Corp., an indirect,
wholly-owned subsidiary of the Company, entered into that certain Limited
Waiver to Loan Agreement (the "Securitization Facility Waiver") with Three
Pillars Funding LLC, and SunTrust Robinson Humphrey, Inc., the sole
purpose of which was to waive any defaults that would have occurred under
the Company's existing accounts receivable securitization facility because
of a certain cross-default provision contained in the existing accounts
receivable securitization facility. That cross-default
provision is triggered by the Company's default on any debt obligation in
excess of $5 million, regardless of whether such default is
waived. Thus, a default under the Credit Agreement, although
waived, necessitated a waiver under the Company's existing accounts
receivable securitization facility. The Securitization Facility
Waiver is effective for the period commencing June 30, 2008 and ending
August 29, 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
concerning the Company's obligations under Amendment No. 2 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
July 7, 2008, the Company issued a press release announcing the Daimler
Financing, Amendment No. 2, and the Securitization Facility
Waiver. 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
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Covenant
Transportation Group, Inc. press release announcing the Daimler Financing,
Amendment No. 2, and the Securitization Facility Waiver.
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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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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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COVENANT
TRANSPORTATION GROUP, INC.
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Date:
July 7, 2008
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By:
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/s/ Richard B. Cribbs |
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Richard
B. Cribbs
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Senior
Vice President and Chief Financial
Officer
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EXHIBIT
INDEX
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EXHIBIT
NUMBER
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EXHIBIT
DESCRIPTION
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Covenant
Transportation Group, Inc. press release announcing the Daimler Financing,
Amendment No. 2, and the Securitization Facility
Waiver.
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