Banks Grant BISYS Credit Default Extension

The mutual fund industry outsourcing experts BISYS Group indicated yesterday that it has received a "consent and waiver" from its lenders, which essentially gives the New York-based firm a little breathing room on a credit default.

BISYS lenders have given the firm until Aug. 1 to fulfill its obligations. The consent and waiver was obtained at no charge, company officials said.

The default occurred because BISYS was unable to file credit-related paperwork - a Form 10-Q and a related compliance certificate - on a timely basis. The quarterly filing has been held up as BISYS conducts an internal audit into a Securities and Exchange Commission investigation of how it accounted for payments made to certain advisers for, among other things, the cost of marketing and distribution of fund shares.

BISYS has also agreed not to request additional credit during the extension period. Company officials noted in a statement that it "believes that its operating cash flows and cash on hand will be sufficient to support its near-term working capital and other cash requirements."

"We're looking forward to putting this investigation behind us and doing so as soon as possible," a company spokesman added.