Asset Acceptance Capital Corp. has amended and restated a $100 million revolver with its J.P. Morgan-led bank group, taking advantage of a competitive market. The amendment will reduce borrowing costs and increase availability for the debt collection agency, said Mark Redman, Asset's cfo.
The amendment has given the Warren, Mich.-based company a $20 million accordion feature that was not part of the previous deal and extended the maturity date of the revolver by a year. The old facility was expiring in May 2007. The company also lowered pricing on borrowings and on the unused facility fee by up to 25 basis points.
Bank One led the previous facility. The five-member syndicate stayed unchanged and includes Standard Federal Bank, Comerica Bank, National City Bank and Fifth Third Bank. Redman said the idea to amend the facility stemmed from ongoing dialogue with the group and is a response to market conditions and the company's improved financial results. Redman said it helped that, "the banking environment has become a slight bit more competitive so they are making sure our pricing is competitive and we don't shop it elsewhere." A $100 million capital infusion from a public offering last February also enabled Asset to improve terms.
Redman said the relationship with the bank group goes back to 1994, but at that time Bank One did not have the skill set to take Asset public. Asset chose Bear Stearns as sole book-runner lead manager of the offering. William Blair & Co., CIBC World Markets and SunTrust Robinson Humphrey acted as co-managers.