Waters Corp. tapped a syndicate of 19 banks to refinance its existing credit facilities and wrap them into a $1.1 billion deal, John Lynch, treasurer in Milford, Mass., said. The analytical technology products and services provider felt it needed a large bank group because of the size of the facility. "A smaller bank group would push the limit of the amount we could borrow," he explained.
JPMorgan took the lead on the credit, supported by ABN AMRO, Bank of America, Citizens Bank, Barclays Capital, Bank of Tokyo and Bank of Ireland. All banks committed a substantial portion to the deal, Lynch said. Waters decided to refinance largely because of the number of banks willing to lend. "There's good competition, a good amount of liquidity a number of banks are eager for funded assets," he said.
The new five-year, $1.1 billion credit facility comprises a $600 million revolver split into a $350 million U.S. tranche and a $250 million euro tranche, and a $500 million term loan. Waters was driven to the bank market by the need to refinance, but also tighter credit spreads and the ability to extend the debt's maturity. The new credit is slightly larger than what existed and increases the amount of the expansion feature to $250 million.
Previously, the company had two credit facilities an $800 million deal consisting of a $550 million revolver and a $250 million term loan, and another $250 million term loan that was added as Waters' credit needs expanded over time. "It's kind of like having a great second mortgage wrap it all into one," Lynch said of the new deal.
Waters also cut about 20 basis points off the interest rate, falling to a range based on leverage of LIBOR plus 33-72.5 basis points from 29.5-92.5 basis points. Lynch said the company was pleased with the pricing, but would probably have to price it again in the future, although there are no current plans for it.
Despite having a syndicate of 19 banks, Lynch said the process ran very smoothly. "We had the advantage of having a fairly large facility already outstanding," he said. "The bank group was basically the same they knew us, knew our credit, had a history with the company."
Waters is active in liquid chromatography, mass spectrometry and thermal analysis.