 |
| Salvatore Fazzolari |
Harsco Corp. has replaced two bank facilities with a $350 million revolver that was driven by the current high demand for credit. "Because of the market provisions we felt it was the right time to do this and we took advantage of it," said Salvatore Fazzolari, cfo and treasurer of the industrial material and equipment company. The credit was oversubscribed with up to $450 million offered, he said, adding, "There was tremendous demand."
The new J.P. Morgan-led revolver is undrawn and will serve a backup to Harsco's investment-grade commercial paper programs. The main advantage of the new three-year revolver is the possibility to eliminate the administrative burden of having to renew a facility every year. The new revolver replaces a $131 million, 364-day facility that expired this month and a longer-term $219 million facility set to mature next September, explained Bob Yocum, Harsco's assistant treasurer. Pricing on both facilities remained the same. The first-drawn price of the revolver is LIBOR plus 40 basis points while fully drawn it becomes LIBOR plus 52 1/2 basis points.
J.P. Morgan led Harsco's current and previous deals and the bank group remained substantially unchanged, said Fazzolari. "We actually have a very close collaborative arrangement with J.P. Morgan. We sat down, got a strategy and executed the strategy," he noted. "They are the leader in this market and we've had at least 10 years of experience with them," Yocum added.
SunTrust Bank, Bank of Tokyo-Mitsubishi, Citibank, The Royal Bank of Scotland, ING Capital, Banco Bilbao Vizcaya Argentaria and Lloyds Bank acted as co-syndication agents. "The pricing was fair given the market conditions. We were very happy that the deal was substantially oversubscribed. We were [also] very pleased with the commitments from our key banks. They continued to support us enthusiastically," Fazzolari added.