Florida East Coast Industries has refinanced its revolver from Bank of America with terms that underline the attractive financing market. Although the initial loan was close to its maturation, Brad Lehan, treasurer, said the optimal market was a factor. "It's one of the best times to get a deal done from a pricing perspective."
The loan for the company, which operates the real estate concern Flagler Development Company and railway company, Florida East Coast Railway, will help facilitate growth of the development side of the real estate holding.
The five-year, $150 million unsecured revolver, replaces a $200 million revolver that was expiring March 31. The new agreement has a commitment fee of 12.5-25 basis points and the spread is LIBOR plus 50-112.5. The current commitment fee is 12.5 basis points and borrowings are at LIBOR plus 50 basis points.
The loan from 2001 had a three-year tenor with two, one-year extensions, but the company did not exercise one of those. That loan had ten banks involved, but Lehan said that four banks, "is a treasurer's dream to have the same number of banks as you have ancillary businesses." He said that as the company tried to resize its revolver it consolidated down to four banks: Wachovia Bank, SunTrust Bank and LaSalle Bank, along with BofA.