Harsco Renews $131 Mln Facility to Back Up CP Program
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Harsco Renews $131 Mln Facility to Back Up CP Program

Harsco renewed a $131 million credit facility on Sept. 28 as a back-up to its commercial paper program. Robert Yocum, assistant treasurer, explained that the deal replaces a same-sized, 364-day deal. Pricing remained the same, but Yocum declined to reveal specifics. There were also no material changes to the covenants. Harsco is an industrial services and products provider.

The company has renewed its 364-day back-up annually since 1994. Harsco has never drawn down on the facility, but continues to renew it due to the requirement to have bank debt to back up commercial paper. The commercial paper program is roughly $350 million and is used for working capital expenses. Yocum says the company has chosen to use commercial paper rather than bank debt as a financing option because it's a cheaper alternative. "The interest rate is less on commercial paper," he said. Some companies are being bitten by the rollover of short-term borrowings. A Harsco spokesman said Yocum would not comment on how Harsco is faring in this environment. The company also has bonds to round out its debt structure. The company has a $150 million bond deal with a 6% coupon that's due in 2003 and a GBP200 million bond deal due in 2010.

J.P. Morgan, the company's original lender, continues to lead the facility and the company did not go out to bid. There are 10 banks in the syndicate that Yocum declined to name, but he said the company did not add any new banks with the renewal. He is, however, open to other banks approaching the company. The deal was oversubscribed slightly, but the company chose to cut back to the amount it originally sought.

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