American Axle hopes for JP Morgan/BofA agreement today

Autoparts manufacturer American Axle is desperately avoiding bankruptcy as it entered into a fourth waiver extension yesterday with its lenders. The waiver extended the termination date from 15 September to 17 September in order to reach an agreement with JP Morgan and Bank of America on a comprehensive solution to its financial and commercial challenges outside of bankruptcy.

Like the previous waivers, the fourth waiver also required that American Axle maintain a minimum liquidity level of $75 million, and prohibited the company from falling under this level for more than four consecutive business days.

At the end of August, American Axle reached an agreement in principle with General Motors, who will provide $110 million, and an additional $100 million second lien term loan facility. The arrangement, however, does not reduce the company’s debt amount, and it remains questionable whether American Axle will be able to achieve projected targets in revenue in ebitda for 2010 and 2013.