Dairy manufacturer and distributor WestFarm Foods chose Wachovia Securities to lead its new credit facility over previous lead CIT Business Credit because of Wachovia's presence in the dairy market. CIT is still in the new credit agreement and is playing a major role in the line, noted Stephen Boyd, WestFarm's v.p. and cfo. "[Wachovia has] been a major funder of several companies in our area," Boyd said. "That was probably the single biggest factor that was a positive for them--their wealth of experience in that industry segment."
The new $150 million revolver replaces a $110 million facility that was set to expire this month. "The new facility brings in a group of financial institutions that understands our marketplace," Boyd said. "[The deal] provides us with a larger line of credit that allowed us to fund our expansion plans and it provided us with additional liquidity to meet normal growth within the company."
The company was happy to have good market conditions at the time of the old facility's expiration, Boyd said. "We were fortunate to be able to take advantage of the opportunity in the bank market when there is a good deal of liquidity there," he added. "The company benefited from economic conditions as well as banks being quite interested in working with people in the food industry who have stable growth and earnings."
The new facility has a tenor of four years. "We're planning on our growth needs over the next three to four years and wanted to have something in place that would allow that," Boyd commented, on the increase in the size of the loan. He declined to comment on pricing.