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| Shelley Green |
Favorable market conditions and an approaching maturity led Teledyne Technologies to establish a new five-year, $280 million unsecured revolver. The new revolver provides the company with cheaper pricing and more capacity than its previous facility, noted Shelley Green, Teledyne's treasurer. "Our current facility was set to expire in November of this year and we decided that market timing was in our favor to go ahead and get it done earlier in the year," she explained. "Pricing was more favorable, there was more capacity, it was a good time to go out for a longer-term facility." Green said the company would have achieved different pricing and would have been unable to get a five-year tenor if the deal had been done a year earlier. The deal went out to the market at $200 million, the size of the previous credit line, but was oversubscribed. "When it came back oversubscribed we decided to go ahead and take the oversubscription," Green noted. "Due to our higher level of activity in the M&A market, we wanted the capacity there to help us attain our goal of growing." Banc of America Securities and BNY Capital Markets led the deal. B of A was the company's previous lead and BNY was an existing lender. "It was our decision this time that we wanted two co-leads to help facilitate the deal going forward with our larger requirements and access to the market," Green said. "Both banks have been long time supporters of Teledyne." Other lenders on the credit include Bank of Tokyo-Mitsubishi Trust Co., Bank One, Mellon Bank, SunTrust Bank, Comerica West, Wells Fargo Bank, Calyon and Sumitomo Mitsubishi Banking Corp.
Borrowings under the facility were used to fund Teledyne's acquisition of water-testing instrument manufacturer Isco. The company could have used the old facility to finance the acquisition, but it was good timing to have the new deal closed and begin borrowing under it, Green said. The old facility was put in place in 1999 and the new pricing is slightly lower, Green noted. The spread ranges from LIBOR plus 5/8-1 1/4% drawn and LIBOR plus 15-30 basis points undrawn. The company also added a $100 million accordion feature to the credit. "That's a great benefit," Green said. "Now we've got it locked in, we don't have to be concerned. We have our line of liquidity in place for the next five years."