Long Island City, New York-based Standard Motor Products, Inc., has secured a $225 million revolving credit with GE Capital, which landed the lead over four other bidders, noted James Burke, cfo. The five-year credit represents the company's first foray into secured loan territory and Burke said the firm won with the most competitive bid. "GE Capital was picked to lead the deal following tough negotiations with five interested parties," Burke added, declining to name the competition. A mixture of factors including personnel narrowed the parade to two, and then flexible pricing and the overall package led to a decision, Burke explained.
Grid pricing on the deal is good, but the markets have tightened significantly, stated Burke. The out-of-the-box spread on the new credit is LIBOR plus 2 1/4 %. Standard Motor wants to expand and look to a more long-term form of financing, said Burke. The credit, which closed on April 30, will retire existing debt including a $110 million, three-year revolver from 1998, $52 million in senior notes and $25 million in receivables. The company, which manufactures and distributes auto parts, still has $90 million in subordinated debt, added Burke.
GMAC Commercial Credit is syndication agent and Bank of America documentation agent. Standard & Poor's rated the last $110 million revolver BB, while pricing was also LIBOR plus 2 1/4 %. Revenue for 2000 was reported at $606.5 million, down from $658.2 million for 1999.