Favorable bank market conditions enabled Stillwater Mining Company to shave 100 basis points off the interest rate on its $140 million term loan. Gregory Wing, cfo of Stillwater, said obtaining cheaper financing was straightforward. "Conditions in the market have softened. We had been looking at doing this since mid-December. The market supported it," said Wing.
Stillwater approached Toronto Dominion, the lead arranger on the financing, to reduce the interest rate on the loan. The bank was the original agent on the financing. Pricing on the loan was reduced to LIBOR plus 2 1/4%. The company originally entered into the six-year term loan in August 2004. The price reduction will save the Montana-based mining company $1 million in interest expense.
The amendment also institutes a 1% prepayment penalty for repricing of the term loan or voluntary prepayments of principal for one year following the Jan. 30, 2006 amendment date.