| Stuart Shears |
Specialty chemical manufacturer Hercules increased the size of its institutional term loan, while cutting the interest cost. The tranche was previously $250 million at LIBOR plus 2 1/2% and is now $400 million at LIBOR plus 2 1/4%. "We wanted to extend the maturity, increase the amount and we wanted new terms and conditions," noted Stuart Shears, Hercules' v.p. and treasurer. The new "B" loan matures in six-and-a-half years. In addition to the "B" loan changes, the company did an offering of $250 million of 6 3/4% senior subordinated notes due 2029. Loan and note proceeds will be used to pay down some of the preferred stock, Shears noted. Hercules has a call on $363 million of preferred stock, which carries a coupon of 9.42%. "Now is the first time we can repay the trust preferred securities," Shears said, explaining the timing of the new loan.
Credit Suisse First Boston and Wachovia Securities, the incumbent leads, continue to lead the new bank deal. "They're just really good at it and we have confidence in both of those banks' ability to get the deal done," Shears said. CSFB served as administrative agent, while Wachovia was syndication agent. The facility also includes a five-year, $150 million revolver at LIBOR plus 2 3/4%.