Covenant Sets Refinancing Plan With Daimler Truck Financial

Covenant Transportation Group said it completed the first step in refinancing its long-term debt, including a secured revenue equipment financing agreement with Daimler Truck Financial for about $200 million.

The truckload carrier said late Monday it expects the remainder of a refinancing package will be completed later this third quarter.

“The Daimler [credit] facility is available to fund new tractors expected to be delivered in 2008 and 2009,” said M. David Hughes, Covenant’s treasurer.

“Following relatively modest capital expenditures in 2007 and the first half of 2008, we expect to replace approximately 713 tractors and 200 refrigerated trailers during the next 6 months, and 1,800 tractors in 2009,” he said in a statement.

Daimler Truck Financial is part of Daimler AG, parent company of Daimler Trucks North America, which makes Freightliner, Sterling and Western Star Class 8 trucks in the United States.

Covenant said it expects to close on about $8 million in mortgage financing “in the next several days,” and that it expects further financing in the current quarter ending Sept. 30.

Covenant is ranked No. 38 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.