CB Richard Ellis has cut 125 basis points from interest payments after upgrades from Moody's Investors Service and Standard & Poor's; Moody's rated the senior debt Ba1 and the senior subordinated debt Ba2, and S&P assigned BB+ and BB- ratings. The $600 million facility, led by Credit Suisse, contains a $200 million accordion provision that was added after the May 1 upgrade. Pricing on the new facility is based on a leverage ratio.
Kenneth Kay, cfo, said the timing of the new facility for the Los Angeles-based commercial real estate firm was consistent with the ratings actions as well as the pay down of 11 1/4% senior subordinated notes. He added, however, that the June redemption ate up most of the company's operating cash flow.
CB Richard Ellis plans to use the new facility to refinance a $265 million outstanding term loan and to support its in-fill acquisition program, although Kay said the new facility was unrelated to the simultaneous acquisition of the Polacheck Co.
Kay noted Credit Suisse had led CB Richard Ellis' previous credit facility as well. "We have had a long relationship with Credit Suisse relative to our capital markets activities," he said. "They know us really well and that facilitated having the process being handled as efficiently as possible."