Allied Holdings has received commitments for a $202 million revolving credit line to refinance its expiring credit facility and address its subordinated debt obligations set to mature in February 2003. "We wanted to put in place a facility that would allow us to refinance both the bank debt and the subordinated debt by using our subordinated collateral base to secure borrowing," said Dan Popky, senior v.p. finance and cfo for Allied. The credit will be led by Ableco Finance and Foothill Capital, covering $173.5 million of the line. The remaining $23.25 million will be provided by existing bondholders. Popky declined to comment on pricing on the deal, which is expected to close later this month.
The credit replaces a five-year, $230 million secured credit structured as a revolver and a term loan, priced at LIBOR plus 4 1/4%. Originally set to mature on Jan. 31, 2002, the facility was extended pending the completion of the refinancing. Even though FleetBoston Financial led the former facility, Allied chose new leads after considering a number of proposals. Popky said Ableco and Foothill were the best banks for the deal, declining to comment further. "[The banks] are two leaders in the asset-based lending and specialty finance arenas and they provided us with the best alternative for refinancing," said Popky.
The facility is the last stage of Allied's turnaround plan designed by newly hired President and CEO, Hugh Sawyer, its senior management, and a consulting firm to combat its deteriorating financial performance. "We now have a three-year revolver that provides us with the liquidity and the opportunity to complete the turnaround."