Astaris has wrapped up a $75 million asset-based revolver that will serve as a new and independent source of financing for the phosphorus chemical producer. Astaris is a joint venture of industrial chemical producers Solutia and FMC Corp. and the new credit detaches Astaris' finances from Solutia, which filed for bankruptcy in December 2003.
Astaris announced a restructuring in October 2003 and the new financing is the culmination of this effort, said Paul Schlessman, Astaris' cfo. "Upon successful completion of the restructuring we entered the credit markets and were able to obtain a new completely independent financial arrangement based only on the operating performance and success of Astaris," he noted. The new credit facility will allow Astaris to repay Solutia and FMC $16 million each that had been deferred and was subject to the completion of the company's restructuring.
The new three-year revolver replaces a previous $20 million credit amended in 2003. The old facility was set to expire in September, but Astaris wanted to enter the credit market well in advance, said Schlessman. The facility also has an accordion feature that allows St. Louis-based, Astaris to increase the credit by $25 million to $100 million subject to the lenders' approval. Schlessman declined to disclose terms and conditions, but said Astaris' overall costs are lower.
Citibank leads the new revolver. Bank of America led the previous credit. "The company went through a competitive review and Citi provided the most attractive basket of terms and conditions," Schlessman said. He stressed that Astaris maintains a good relationship with B of A, which still participates in the new syndicate. Schlessman said the lending group changed after the formerly standard loan evolved into an asset based credit. Wells Fargo Foothill and LaSalle Bank also participate in the new line.
"We were coming out of this restructuring and we began to approach several financial institutions to see what the market was like, how much debt capacity we really had, what were the best terms and conditions we could get for a new financing going forward," Schlessman said. "So, it was really all part of this process that was kicked off with this restructuring effort that we started in October 2003."