NEW YORK, Nov 17 (Reuters) - Masonite International, a Canadian door maker struggling to avoid bankruptcy, said on Monday it reached an agreement with most of its bondholders that will give it additional time to restructure it debt load.
The company, which is owned by private equity firm Kohlberg Kravis Roberts & Co, failed to make an interest payment on its $770 million in bonds on Oct. 15, and had until Sunday, Nov. 15 to make up for the failure.
The company failed to make the payment by Sunday, but said it entered into a forbearance agreement with the majority of noteholders that will give it more time.

"Masonite expects that this forbearance agreement will provide the company additional time and flexibility as it continues to pursue opportunities to develop an appropriate capital structure to support its long-term strategic plan and business objectives," it said in a press release.
Payments on credit default swaps insuring its loan debt, however, have been triggered by the failure to pay interest, sources said.
The may cause losses to sellers of protection on the benchmark loan derivative index, which includes Masonite.
The company has been in negotiations with its senior secured lenders regarding an amendment to its credit, but no agreement has been reached, according to Reuters Loan Pricing Corp.
Terms in its credit agreement forbid it from making interest payments on its unsecured debt until it can amend the agreement.
Ninety-two percent of the holders of Masonite Corp's senior subordinated bonds and 53 percent of holders of debt issued by subsidiary Masonite International were party to the agreement, the company said. Both bond issues are due 2015.
The agreement is effective through Dec. 31, 2008.
KKR took Masonite private in a leveraged buyout in 2005.

(Reporting by Karen Brettell; Editing by Dan Grebler) Keywords: MASONITE DEFAULT/ (karen.brettell@thomsonreuters.com; +1-646-223-6274; Reuters Messaging: karen.brettell.reuters.com@reuters.net)

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