CB&I completed an expandable $350 million, three-to-five year credit facility led by Bank One and Bank of America that doubles its previous available credit. The credit increase gives the Texas-based utility engineering company room to grow, according to Tim Moran, treasurer of CB&I. The deal consists of a $350 million, three-year revolver priced at LIBOR plus 11/2% with a five-year performance letter of credit priced at LIBOR plus 1%. The revolver is expandable to $400 million. CB&I's previous $175 million credit, led by the same two banks, was refinanced with the new facility, said Bank One officials.
Moran said timing was the key to the deal. "We had a 364-day review program, which was an annual rollover, so we had an August deadline" to put a new credit plan in place, he explained. The approaching deadline prompted a review of the company's credit needs. "We decided early on in the year that that's what we would do to restructure the facility to more appropriately address our needs," said Moran, explaining that the three-to-five year structure offers more value to CB&I than a 364-day credit. Bank One officials added that the credit would give CB&I room to bid on project contracts without needing to complete one-off letters of credit for each. The bank officials said the credit was "received extremely well" and they were able to add 10 new banks to the facility, bringing the total in the syndicate to 18.