Gold Kist, a co-operative chicken company, amended and restated its revolver to accommodate a $200 million note deal that will pay down a term loan. "We had been considering going to the bond market and the fundamentals in the bond market were very attractive," said Steve West, Gold Kist's cfo. "We decided to do this note deal and that necessitated the renegotiation of the revolver." The three-year, $125 million revolver is led by Rabobank. "It's a liquidity facility in conjunction with the note deal," West said. "When the deal closes, the only drawings will be standby letters of credit under the commitment, for approximately $30 million."
The revolver was originally a part of a $250 million facility that included the $140 million term loan. "The note structure would provide us additional flexibility and extended the maturity to 10 years," West said. The revolver is priced on a grid tied to debt-to-EBITDA with a margin of LIBOR plus 21/4-31/4%. The revolver will carry a spread of LIBOR plus 23/4% out of the box for six months. On the issue of interest payments, West noted. "I'll never be satisfied with pricing."
"We were oversubscribed on the revolver deal and basically we just offered the deal to our existing bank group," West noted. The revolver group comprises SunTrust Bank, Harris Bank, ING, CoBank, CIT, Greenstone Farm Credit, Natexis and US Bancorp. Credit Suisse First Boston leads the bond deal.