Bank of America Provides For Career Education

  • 02 Feb 2003
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Career Education has chosen Bank of America over incumbent LaSalle Bank to lead an upsized credit facility to be used for acquisitions. Patrick Pesch, Career Education cfo, explained that the company actively shopped the deal, putting out a detailed request for proposals. "We looked at Bank of America as having a slight edge," said Pesch, adding that the bank had a good understanding of Career Education's business and of how the credit would be used. B of A structured the credit to provide flexibility so that the company could pursue future acquisitions, he added. LaSalle Bank still participates on the deal as a co-syndication agent.

The new $200 million, five-year revolver replaces the company's $90 million, five-year revolver that was set to expire this October. The company increased the facility so it could have commitments in place to pursue larger acquisitions. "We would not have upsized the facility if we didn't see strong expectations of using it," said Pesch, declining to comment on specific targets in the pipeline. The credit is priced against a leveraged-based grid and is currently set at LIBOR plus 3/4 % with a commitment fee of 50 basis points. The pricing did not substantially change from the former credit, although Pesch noted that the credit environment was much more favorable to borrowers in 1998.

Career Education has grown substantially since the company secured its former facility. In 1998, annual revenues were less than $200 million, but now the company expects to finish 2003 with $750 million in revenues. With the growing size of the company, Career Education outgrew the size of its former credit, said Pesch. J.P. Morgan, SunTrust Bank, Fifth Third Bank, Harris Trust and Savings Bank, National City Bank, and Union Bank of California also participated in the deal.

  • 02 Feb 2003

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