JohnsonDiversey held a lender call last week to amend its credit agreement to reflect its shifting focus from integration to growth and the need to pursue global relationships. "The amendment will provide additional financial flexibility necessary to support the growth as well as the strategic objectives of the company by adjusting certain covenants," said Joseph Smorada, executive v.p. and cfo, on an investor call.
The affected covenants cover annual limitations on capital expenditures, joint ventures and strategic alliances as well as leverage ratio changes. The company is also requesting that certain of its credit facilities be brought into line with current market conditions while addressing certain provisions that limit the company's tax planning, Smorada added. The amendment will require at least 51% of the lenders commitments.
According to a 10-K filing, Johnson has total indebtedness of $1.3 billion, including $685 million under the senior secured credit facilities. Citigroup and Goldman Sachs lead the loans, which were put in place to fund the acquisition of the DiverseyLever business in May 2002, when the company took out $1.4 billion of debt. Bank One, ABN Amro, Royal Bank of Scotland and GE Capital Corp. are co-documentation agents. The credit has been amended twice since then to reduce pricing and an "A" tranche has been fully repaid.
According to Markit, Johnson has a $414 million "B" loan and a $215 million European tranche. The company also has a $307 million revolver that is only partly drawn. The "B" loan is priced at LIBOR plus 2 1/4%. Officials at Citi and Goldman did not return calls by press time.