Ametek closed a $300 million deal late last month, replacing a $195 million revolver ahead of schedule and opting for a long-term facility to avoid refinancing in a rockier market. There was another incentive. "A five-year facility is much more favorably received by rating agencies; they know you have the commitment there for the long term," said Deirdre Saunders, v.p. and treasurer. The company had considered a 364-day facility, but ended up going with a five-year deal. Ametek sought out a $250 million deal, but it was oversubscribed by $100 million. The company chose to cut back to $300 million because it didn't need the full amount. Saunders added that the company has also grown through acquisitions, and needed a larger credit to accommodate that.
Saunders credits the company's being a defensive industry as helping to get the deal oversubscribed. "We were very much oversubscribed, to our delight. It's a hard market for a lot of companies, but we were well-received. We're not a dot-com; we're a stable business." The syndication process began this past summer. The company considered mixing up maturity dates, but ended up going with a five-year deal instead of taking out a 364-day facility as well. "We weren't sure what the market would be like in another year," she said. "By having a multi-year commitment, you don't have to go through the expense of renegotiating and facing an uncertain market. It's probably no more expensive to pay the five-year fees than to pay an amendment fee for the next year [on a 364-day]."
J.P. Morgan leads the deal. The company did not go out to bid. "We have a long relationship with them and they've managed syndication well," Saunders said.