Live Nation has announced an amendment to its existing credit agreement, which gives the company increased flexibility in its debt covenants.

The live entertainment industry has been decimated by COVID-19 and the amendment extends the time period during which Live Nation’s maintenance covenant will focus on liquidity metrics, continuing the substitution of the net leverage covenant with the liquidity covenant under its existing senior secured credit agreement.

The covenant, a condition in a commercial loan or bond issue that requires the borrower to fulfil certain conditions, requires that Live Nation has $500m of liquidity, event-related deferred revenue of up to $250m, availability under the company’s existing revolving credit facilities and availability under its existing $400m delayed draw term A loan facility.

Under the terms of the agreement, the lenders have agreed to further suspend Live Nation’s net leverage covenant until December 31, 2021, unless the company elects to resume the net leverage covenant testing earlier.

Previously, this suspension was due to last through September 30 of this year. In addition, the net leverage covenant test has been amended and increased on favourable terms.

Michael Rapino, president and chief executive of Live Nation, said: “This amendment provides us additional financial flexibility so that Live Nation is ready to unite fans and artists quickly when the time is right.

“Given our strong liquidity position, we believe the change to a liquidity test allows the seamless operation of our business over the next year, by which time we expect concerts to be returning to scale.”

The Ticketmaster parent company said in April it would suspend covenants before using its 2019 earnings figures to calculate its net leverage covenant from the fourth quarter of 2020 until the second quarter of 2021.

In May, the entertainment giant reported a 21 per cent year-on-year drop in revenue for its first quarter to $1.37bn, with ticketing down 16 per cent. It also announced plans to raise $1.2bn in a new debt offering after the US Federal Reserve began its corporate bond buying program.

In April, Live Nation also announced a $120m revolving credit facility loan and plans for $500m in cost cuts this year, including chief executive Michael Rapino forgoing his $3m salary.