Approaching maturities led CompBenefits Corp. to take out a new $137 million credit facility, refinancing its existing deal. "We needed to [refinance] by mid-year because of the revolver expiring and amortization on the term loan," noted George Dunaway, CompBenefits' cfo. The new facility comprises a $15 million revolver, $80 million "B" loan and $42 million second-lien "C" loan. The revolver and "B" loan mature in four-and-a-half years, while the "C" loan is due in five years. The revolver and "B" loan carry a spread of LIBOR plus 4%, while the "C" loan is priced at LIBOR plus 63/4%.
The previous facility consisted of a term loan and revolver. The term loan was priced at LIBOR plus 41/2%. "On a weighted-average basis [pricing] is actually slightly higher because of the two tranches, but we did reduce some of our sub-debt," Dunaway said. Market conditions led to the second-lien structure, Dunaway noted. "Our overall leverage was such that we thought it would be tough to get a single first-lien piece in there," he said.
Bank of America led the facility while GE Capital and Antares Capital served as syndication agents. B of A was the previous lead and both GE and Antares were participants in the old facility, Dunaway noted. "We did the whole deal pretty quickly and it basically worked out as we suspected," he added.