Citibank is in the market with an amendment to cut the spread on FMC Corp.'s $243 million "B" loan by 75 basis points to LIBOR plus 1 3/4%. "A combination of what we perceived to be our improvement in creditworthiness and improved market conditions make 175 the right place," said Tom Deas, FMC's treasurer. Citi, Bank of America and Wachovia Securities are the leads on the credit, but Citi is leading the repricing because it is the administrative agent.
The credit was originally put in place in October 2002 and the "B" loan carried a spread of LIBOR plus 4 3/4%. In December 2003, the company returned to the market and cut the spread by 225 basis points to LIBOR plus 2 1/2%. "We're not aware of a whole lot of repricings that were greater than that," Deas said. "We had very high acceptance in December and we're anticipating very high acceptance this time around."
The credit also includes a $250 million revolver and $40 million letter of credit facility. Deas declined to comment on the pricing of those tranches because they are not affected by the amendment. "In October 2002 there were very bad market conditions and FMC was kind of a new high-yield issuer and we had a perfect storm of conditions that resulted in a very high spread," Deas explained. "We think that it's moving in the right direction now."