Northern Trust and Mizuho Bank have rejoined Corn Products International's bank syndicate after a four-year absence, chipping in on the company's new $500 million credit facility. Corn Products inked the new credit to take advantage of increased liquidity in the loan market, said Cheryl Beebe, cfo.
Beebe said Northern Trust and Mizuho left its syndicate in 2002 because of difficult market conditions after the collapse of Enron and WorldCom's bond default. But the company welcomed them back for the financing as well as six new banks. Beebe said the company values long-term relationships, but said it has no bad feelings about the banks that dropped out. "As long as our relationship with the bank is upfront and they give clear reasons for their decisions, it is fine with us," said Beebe.
SunTrust Capital Markets leads the new facility, which consists of a $470 million U.S. revolver and a $30 million Canadian revolver. Both facilities are priced at LIBOR plus 50 basis points. They replace a $150 million U.S. revolver and a $30 million Canadian revolver, both priced at LIBOR plus 55 basis points. The company capitalized on its improved financial condition to enter into a larger and cheaper credit facility. It will use the proceeds for general corporate purposes, including acquisitions. It may also refinance bonds due in 2007 and 2009.
SunTrust was the lead on the company's previous facility. Beebe said it has a good relationship with the bank and that it has done a good job of leading facilities in the past. She added that the company values banks that understand its business Corn Products is a large refiner and supplier of corn products. It also values banks that have the ability to offer additional services, such as letters of credit, and those banks that have an international presence.