Supply chain solutions provider EGL, replaced its secured revolver with a new $150 million unsecured facility, giving the company more financial flexibility. In addition, EGL increased the size of the line from $100 million. "Given the strength and financial position of the company we wanted to move to an unsecured facility, giving us more financial flexibility. $150 million gives us more room to entertain things like stock repurchases and strategic acquisitions," stated Rishi Varma, legal counsel.
The previous credit was set to expire in December and EGL had already begun the process of renegotiating with lead arranger Bank of America to get a new facility in place. "We went through the process of getting selective bids but B of A was very good to us the first time and through the life of the existing facility and they came up with the best bid for our new facility," Varma said. "We like being able to extend the relationship with them."
In addition, pricing is better this time, Varma said. "Anytime you can get lucrative terms for a higher amount of revolver that's a good thing." The grid on the new credit ranges from LIBOR plus 3/4-1 3/4% versus LIBOR plus 2-2 3/4% on the old credit. The sublimit for letters of credit was increased from $50 million to $75 million. The revolver is currently undrawn. Lenders include Comerica Bank, Branch Banking and Trust Co., ANZ, Compass Bank and Southtrust Bank