Miller Industries Inc., the world's largest vehicle recovery and towing company, has secured a new credit facility with much lower spreads than on its previous loan. Bank of America and CIT Group's business credit division are arranging the $118 million refinancing, expected to close in June.
Pricing on the four-year credit--LIBOR plus 2 1/4% on the revolver and LIBOR plus 21 2% on the term loan--will save the company several million dollars per year in financing costs, said Vincent Mish, cfo. Spreads on the old credit, structured as a $100 million revolver and $19 million term loan, were LIBOR plus 2 1/2% to 4 3/4% and 5 1/2 % to 6%, respectively. The term loan increased to 8% over LIBOR in February. The old facility was slated to mature in August and needed to be extended or refinanced, said Mish. The reduced interest payments are a reflection of the structure of the loan, he said, declining to comment further.
Mish noted the new $110 million senior secured revolver and $8 million term loan went out to bid to all asset-based lenders in the market. The expertise of B of A and CIT in the sector and existing relationships proved decisive, he added. Mish said that similar banks were involved in the previous loan, with B of A retaining lead status. The loan will be used for general corporate purposes, noted Mish. Commenting on prospects for the industry, Mish noted that towing and recovery is not affected by an economic downturn in the same way as the automotive sector.