Fleetwood Enterprises To Roll Up Lines

  • 03 Jun 2001
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Fleetwood Enterprises will close a $260 million credit facility by mid-June, replacing three facilities currently in place. The deal breaks down into a $230 million, three-year revolver and a $30 million, one-year term loan. Boyd Plowman, cfo, says the company wanted to roll up its outstanding lines. "We wanted to get the majority of our borrowing in one facility because it offers consistent covenants," he said. Fleetwood Enterprises, based in Riverside, Calif., is a retailer of manufactured houses.

Plowman says consolidating the company's financing has been "on our plate for months. It wasn't really market-driven." He said the company is seeking short-term debt, which is why it didn't pursue another type of financing. "That did have to do with the markets. Capital markets for public debt is more difficult now," he said, adding that securing bonds would have been more expensive than short-term debt. "There's a very wide quality spread with regard to investment grade debt versus debt that's not investment grade. We were investment-grade rated last fall, and we're no longer now, so it's a bigger issue for us now. We had very little short-term debt in our capital structure, and we needed it to balance things out."

Bank of America leads the deal, which went out to bid. "They have been one of our primary relationships and are very responsive," Plowman said. "We considered a number of institutions and narrowed it down to three finalists. Bank of America was also very flexible." This is the first syndicated credit line for the company. The company has not yet released its earnings for this quarter.

  • 03 Jun 2001

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