American Commercial Lines (ACL) has emerged from bankruptcy with the potential to capitalize on favorable conditions in the transportation sector. ACL has scored a $250 million asset-based credit line from Bank of America and UBS to fund its exit from bankruptcy in January. Years of overproduction within the industry that led to the scrapping of barges has now worked itself through, leading market conditions to be "as good as they have been in 20 years," said Chris Black, senior v.p, and cfo.
The company also sold $200 million of 9 1/2% senior notes. Black, a former Wabash National Corp. employee who joined ACL just a week after financing was completed, said J.P. Morgan led the $35 million DIP facility and the company emerged from bankruptcy with a $35 million ABL line agented by UBS and B of A. There were also rollover notes on which J.P. Morgan was the agent.
"We based the decision of the lead on the relationships the company had with the banks and [the bank's] ability to execute an ABL deal in the transportation space," Black said. "Nothing against J.P. Morgan, it was simply a selection process the company went through. B of A came in and did a great job working with the company to take it out of bankruptcy with this facility."
Both the ABL and the bond deals were oversubscribed, leading to a reverse flex on the senior line. The pricing started at LIBOR plus 2 1/2% and came down 25 basis points. Wells Fargo, CIT, GE Capital, National City Bank, LaSalle Bank and Wachovia Bank also participated in the syndication. It has drawn about $163 million of the facility. Merrill Lynch was co-manager on the notes.
The network of marine transportation companies operates approximately 3,375 barges and 140 towboats in North and South America. The company filed for Chapter 11 protection at the start of 2003.