Deutsche Bank and Citibank are holding a bank meeting this week for Huntsman International to increase the size of its term loan facility and extend maturities. A new $1.34 billion "B" loan will replace the company's existing $620 million "B" loan and $620 million "C" loan.
The existing "B" loan was set to mature in June 2007 and the "C" in June 2008, noted Curt Dowd, Huntsman's v.p. of finance. The new "B" loan will mature in 2010. "We saw an opportunity in the marketplace today to extend some maturities and to reduce interest rate spreads and we're anxious to get out there and complete the deal," Dowd said. "We hope to complete it by the end of June."
In addition, Huntsman's $400 million revolver is being extended for an additional three years and will now mature in June 2008. The revolver is currently priced at LIBOR plus 3 1/2%, while the "B" and "C" loans carry spreads of LIBOR plus 4% and LIBOR plus 4 1/4%, respectively. Dowd said pricing on the new facility has yet to be determined. "The bank markets are very favorable," Dowd noted. "We expect that when we complete the marketing of the new facilities, the interest rate spreads will be lowered and there will be significant savings to the company."
J.P. Morgan is joint bookrunner on the credit, UBS is participating as syndication agent and Credit Suisse First Boston will act as documentation agent. Deutsche Bank was the lead on the previous facility. "We have relationships with a number of leading firms on the street, and from time-to-time we are able to scribe different roles for those different banks," Dowd said. "We maintain a constant dialogue with all of them and reached a mutual decision to approach the market at this time."