Deutsche Bank and Banc of America Securities have increased Silgan Holdings' "A" loan by reducing the institutional tranche by $100 million. The seven-year "B" loan is now just $125 million and pricing on the tranche has gone to a slender LIBOR plus 1 1/4%.
The banks launched a $1 billion refinancing for the consumer goods packaging company last month, intending to take advantage of the favorable credit conditions. The company planned on improving pricing, extending the maturities and increasing covenant flexibility.
Initially, the pro rata was being pitched at LIBOR plus 1 1/8% and consisted of a six-year, $450 million revolver and a six-year, $325 million "A" loan. The "A" loan has now been increased by $100 million and pricing remains the same. The "B" loan was originally pitched at LIBOR plus 1 1/2%.
According to a Silgan 10-K filing, the loan will replace a $575 million "B" loan, a $66.3 million "A" loan and $151 million drawn on the $400 million revolver. The "B" loan was priced at LIBOR plus 1 3/4%.
During 2005, the company estimates it will use approximately $250-300 million of the revolver for peak seasonal requirements. The company is also continuing to evaluate acquisition opportunities in the consumer goods packaging market and may incur additional indebtedness, under its credit agreement, to finance any such acquisition. Calls to company officials were not returned.