Woodbury, NY-based Comforce, Inc. signed a $110 million, three-year credit facility led by IBJ Whitehall earlier this month, replacing the $75 million, five-year credit the company signed in 1997 led by Heller Financial. Harry Maccarrone, cfo, said the company sought to increase its $75 million credit to finance general corporate expenses, to buy back existing bonds and have flexibility on the acquisition front. Maccarrone said the company switched banks to avoid impending higher pricing by Heller. "The old loan had comparable pricing but they were looking to increase it," he said. The single-tranched new credit is priced at LIBOR plus 250 basis points with a commitment fee of 50 basis points, he said.
Maccarrone explained that expansion of the facility only became a possibility once the company received consent from both holders of its outstanding 12% coupon and 15% coupon subordinated debentures. "We are a pretty leveraged company," he said adding that using proceeds from the bank loan to retire outstanding bonds will be a high priority. Maccarrone said the company originally was only looking to expand the facility from $75 million to $100 million, but to accommodate other interested banks raised it to $110 million. "They did a good job selling our story and certain banks wanted more than we offered," he said. Other banks on the facility include Transamerica, FleetBoston Financial, and J.P. Morgan Chase. Maccarrone said the company reduced the maturity of the loan to three-years to respond to feedback they were getting from the market. "That's the kind of deal they wanted," he noted.