Consolidated Graphics Chooses Bank One
Consolidated Graphics chose Bank One to lead its new $150 million credit line over the incumbent Wachovia Bank due to the bank's better fit with the company.
Consolidated Graphics chose Bank One to lead its new $1 million credit line over the incumbent Wachovia Bank due to the bank's better fit with the company. "Our relationships are local and I think they have a better understanding of our business," said Christopher Colville , executive v.p., cfo and secretary for Consolidated Graphics. Bank One also had more interest in accommodating the company with the changes it wanted to make to the credit, he added.
Wachovia, Guaranty Bank , Mitsubishi Trust and Banking Corp . and Hua Nan Commercial Bank participated in the previous facility but not in the new line. Colville could not comment on the banks' decision to leave. Southtrust Bank , Southwest Bank of Texas and Bank of America are new to the group.
The company's former facility originally comprised a $175 million revolver and a $ million term loan, which amortized over a five-year period. This time around, the company reduced the size of the revolver to $1 million and drew down on it to pay off the term loan exposure, which had been reduced to $20 million. The company decided to obtain just a revolver because it only needed the flexibility of having the line and it would make the transaction easier to manage in light of the changing bank group. "We had delevered substantially since 2000 and had a lot of capacity under the revolver and it's just easier to manage one type of facility," noted Colville.
Both the new line and the former credit were based on a grid tied to leverage, which allows pricing to range between 1 1 / 4 % to 2 1 / 4 % over LIBOR. But under the new agreement, the grid is slightly improved giving the company a lower spread for slightly higher leverage. The current deal carries a spread of 1 1 / 2 % over LIBOR. Consolidated Graphics was also able to extend the maturity on the loan by 19 months; the facility now matures in 2007. The company has more flexibility under the new line with acquisitions and stock buyback programs.