Pike Electric Corp. amended and increased its existing credit facility with a third amendment last week. The term loan was taken out in 2002 to recapitalize the provider of outsourced electric distribution and transmission services company, explained Mark Castaneda, cfo. The revolver is used for working capital. In the future, he anticipates using free cash flow to pay down debt.
The amendment cut pricing by 50 basis points, down to LIBOR plus 1 3/4%, with pricing based on a grid. A revolver was also increased from $70 million to $90 million. Bank of America and First Tennessee Bank were brought in to lead the amendment, each committing $10 million.
The term loan remained at $286.1 million. Accounting for $25.1 million of outstanding standby letters of credit, the available portion of the revolver is $50.9 million. The amendment also provides for an increased level of lease expense and allows Pike to make cash dividends to shareholders once certain leverage ratios are hit.
Barclays Capital and JPMorgan led the company's initial facility and have continued to be Pike's leads. Castaneda said the company added B of A and First Tennessee because the company's existing relationships and their ability to provide cash management and other types of corporate services.