STERIS used strong banking relationships and better operating performance to refinance a $325 million, three-year revolver maturing in June 2003 under more favorable terms. The new $325 million credit offers the company lower borrowing costs and increased covenant flexibility, said Bill Aamoth, company treasurer. He noted that "pricing is much improved," but declined to elaborate on the exact pricing and covenant changes.
Aamoth noted that the company's supportive bank group, including KeyCorp and LaSalle Bank, coupled with the company's stronger operating performance made the timing right for the deal. He said that both factors prompted the company to refinance the credit more than a year before its maturity. A better performance record, which includes improvements in cash flow and earnings results, has led the company's banks to see STERIS as an investment-grade company, said Aamoth. Although the company is not publicly rated, Aamoth said the company was on the border of investment and speculative grade at the time of the former credit closing and is now more of a solid BBB. That solidified position allowed the company to negotiate better pricing. In addition, Aamoth said its bank group has taken more of an interest in the company and has grown more comfortable with its management. "It made sense from the bankers' side to give us more favorable pricing," Aamoth added.
The refinancing deal was a joint effort and the process went smoothly through its close on March 28. STERIS provides sterilization systems for the health care, scientific, research, food, and industrial markets.