IESI Corp. has completed a $400 million credit to support its acquisition of Seneca Meadows, which is the owner and operator of Seneca Meadows Landfill. The credit will also be used to repay the outstanding amount on the company's revolver, for future acquisitions and general corporate purposes, said Thomas Cowee, IESI's senior v.p. and cfo. IESI decided to add to its credit facility when the acquisition timing coincided with the need to renew the company's previous facility.
The new credit comprises a $200 million, five-year revolver and a $200 million, six-year term loan. The revolver is priced along a performance-based grid and currently the spread is LIBOR plus 31/4%. The term loan is priced at LIBOR plus 3%. The term loan is priced lower than the revolver due to the level of demand, which pushed the price down from talk of LIBOR plus 31/2%, Cowee explained. Previously, IESI had a $222.5 million revolver that was priced at LIBOR plus 31/4%. The company also had issued a $45 million "B" term loan, but the outstanding amount of $39.2 million was paid down using proceeds from a private offering of notes in June 2002.
Fleet Securities was the arranger for the facility and Fleet National Bank is the administrative agent. "Fleet is one of the premiere banks that covers the environmental industry," noted Cowee, explaining the company's relationship with the bank. LaSalle National Bank is the syndication agent. IESI also sold $47.5 million in new equity capital to help finance the purchase of Seneca Meadows.