Poor financial performance led C&D Technologies to choose a combination of a bank loan and note offering to refinance its exsiting lines of credit and provide it with additional working capital. It recently closed a private placement of $75 million of convertible senior notes and $125 million of new credit facilities. Stephen Markert, cfo, who left the company last week, said C&D Technologies did a private offering of notes to complement its new bank financing because it was unable to obtain enough bank credit. "Under our financial circumstances, it was the most appropriate financing for our needs," said Markert.
Credit Suisse First Boston led the new issue of notes, which have a 5.25% coupon and are due in 2025. C&D used all of the $72.1 million of net proceeds of the offering to repay outstanding borrowings under its existing senior secured loan facility. The new credit line consists of a five-year, $75 million senior revolver and a $50 million second-lien term loan due 2011. The revolver is priced at LIBOR plus 1 3/4%, while the second-lien loan is priced at LIBOR plus 6 3/4 %. The new deal replaces a $200 million revolver priced at LIBOR plus 1 3/4.
Wachovia Securities leads the new bank deal. Bank of America led its previous credit facility. Markert said it was the decision of the company's new management to choose a new bank to lead its credit. "I have been pleased with Bank of America, but the new management caused us to go with Wachovia," said Markert. He would not elaborate on the reasons the new management chose Wachovia over BoA.
C&D Technologies appointed a new chief executive, Jeffrey Graves, in June after its previous chief executive resigned in March. It posted a $59.5 million net loss for fiscal year 2005, compared with a $49.9 million net income for fiscal 2004.