Affiliated Computer Services recently sold $500 million in five-and 10-year bonds to pay down its $1.5 billion credit line. The majority of the debt on the five-year, unsecured revolver was incurred last month when the company paid $405 million to acquire Mellon Financial Corp.'s human resource and consulting and outsourcing businesses.
The Dallas-based outsourcer of business process and information technology sold $250 million in 4.7% senior notes rated BBB+/Baa1 due 2010 and $250 million in 5.2% senior notes due 2015. Nancy Vinyard, the company's treasurer, said the company sold the bonds in two tranches to diversify its capital structure. "We also wanted to get it done while prices still look good." The company will apply all of the $496 million in net proceeds to the credit line.
Citigroup, Goldman Sachs and JPMorgan co-managed the offering. Vinyard said the company has ongoing discussions and relationships with the trio JPMorgan and Citigroup take part in the credit facility, which was arranged last October. JPMorgan and Wells Fargo Bank were co-arrangers and Bank of Tokyo-Mitsubishi, BNP Paribas and Wachovia Bank hold agent roles. The credit replaced an $875 million revolver. Vinyard said the company will continue fueling its growth through acquisitions but has no plans to return to the capital markets soon.