Canadian non-prime lender goeasy secures debt contract relief after major charge-off

March 24 (Reuters) - Goeasy GSY.TO said on Tuesday it had secured waivers from lenders linked to certain financial covenants for the fourth quarter, easing the pressure on the Canadian non-prime consumer lender after it disclosed a big charge-off and write-downs.

Shares of the company rose 4% in morning trading as the relief helps it avoid raising additional equity. The Ontario-based company was at the risk of breaching several covenants after flagging about C$178 million ($129.61 million) in charge-off and other write-downs tied to its LendCare unit.

"GSY can avoid a worst-case scenario of having to undertake a dilutive equity raise and/or having to idle more of its lending operations, and provides time and space for GSY to re-orient its business plan," ATB Capital Markets analyst Jeff Fenwick said.

The stock has slumped roughly 70% so far this year.

Goeasy now expects to report fourth-quarter results after markets close on March 31, delaying it from March 25 as previously announced.

Under the revised lender agreements, goeasy's financial covenants will be amended to account for the charge-offs and write-downs impacting its fourth-quarter results.

The interest spread on some of goeasy's key borrowing facilities will increase by 100 basis points from its previous level.

The size of the consumer securitization warehouse facility has also been reduced to C$1.12 billion from C$1.4 billion, with the eligibility criteria now excluding the LendCare receivables.

A securitization warehouse facility is a short-term funding line where a company parks its consumer loans temporarily as collateral to raise fresh cash for new lending. `

($1 = 1.3734 Canadian dollars)