Kellwood Co., an apparel and camping products retailer, has completed a $400 million, five-year unsecured credit facility with banks pouring into the deal. Roger Joseph, v.p. and treasurer of St. Louis-based Kellwood, said the deal was considerably oversubscribed and allocations were whittled down for all participating banks. "The supply side of the loan market is very strong and it seemed like the right time to expand our debt," said Joseph. The deal replaces a $280 million three-year facility.
Kellwood has predicted annual sales of around $2.57 billion as opposed to $2.35 billion last year. "We have entered a period of organic sales growth after two to three years of negative sales," said Joseph, who expects additional available cash from revenue and the loan "will leave extra powder for the future."
Bank of America is lead arranger and the syndication agent is J.P. Morgan. Under different names, Kellwood has done business with the two banks since 1961. Kellwood did add SunTrust Bank and Wachovia Securities to the new line though. "We delivered the new banks in the facility to Bank of America," said Joseph. He explained that Kellwood meets with banks regularly to encourage interest in the company and in anticipation of future business. He declined to comment on the specific pricing of the deal, but said, "depending on our use of the loan, we will be saving several hundred thousand dollars annually."
Bank of Nova Scotia,U.S. Bank, SunTrust and Wachovia are co-documentation agents. Bank of New York,HSBC,Mizuho Corp.,Standard Chartered Bank,Union Bank of California and UMB St. Louis are co-agents. First Bank,Israel Discount Bank,Citigroup and National City Bank also participated in the new facility.