Covanta Energy Corp., formerly known as Ogden Corp., closed on a $146 million, one-year credit facility two weeks ago and will be looking to launch a new credit with a new group of lenders by the end of the year or the beginning of next year. Lou Walters, treasurer, explained that after a corporate restructuring the company consolidated its bank debt and set up the new facility to provide interim financing. "This loan won't see its maturity," said Walters, explaining that the credit replaces roughly 40 facilities the company had with over 30 banks to support its former aviation and entertainment businesses along with energy. Walters declined specify banks and pricing on the credit.
Now that the company has decided to focus solely on its energy business, Walters explained that the company is looking to assemble a new group of lenders specializing in the energy sector. "We would like a smaller group of lenders so we can build off our relationships with them," he added. The company has completed roughly 90% of its asset sales relating to entertainment and aviation.
Walters explained that prior to the company's decision to focus on energy in 1999, many of its banks had more specialization in its other two businesses. He said the company decided to refinance the credit by putting all of the outstanding facilities together under one large syndicate. Walters explained that the company had an immediate need for the financing as it is looking to invest $100 million into new products.