Glatfelter Co. has expanded its lender group to include more international banks as it seeks to become a global supplier of specialty papers and engineered products. HSBC, Citigroup and ABN AMRO were all added to the syndicate of Glatfelter's new $300 million credit facility, which will partially fund the acquisition of the carbonless business operations of NewPage Corp., a supplier of coated papers. It will also be used to grow the company internationally. Glatfelter, which is headquartered in York, Pa., currently has operations in Germany, France, the U.K. and the Philippines.
George Amoss, treasurer, said that as the company targets acquisitions internationally, it prefers to deal with banks that have a presence in the country where the acquisition is made. The new facility consists of a $200 million revolver and a $100 million term loan. Pricing on both tranches is LIBOR plus 7/8%. Credit Suisse and PNC Capital Markets are the lead arrangers for this financing. The facility replaces a $125 million revolver priced at LIBOR plus 3/4%.
Amoss said he was satisfied with the pricing. He explained it is priced higher than the previous revolver because the company's ratings have fallen to non-investment grade since the last financing. Moody's Investors Service downgraded Glatfelter's ratings to Ba1 from Baa2 in December 2004. Despite the higher pricing, Amoss said he is pleased with market conditions. "The market is tremendous for borrowers," he said.
Deutsche Bank led the previous facility but Amoss declined to comment on why the bank was not chosen for this facility. He said Glatfelter chose Credit Suisse and PNC to lead the new financing because of its close relationships with the firms. Credit Suisse was the financial advisor on the NewPage acquisition as well as on a number of the company's recent acquisitions. A Credit Suisse spokesman did not return calls.