Bank One took the lead spot on a new four-year, $175 million credit facility after Integrated Electrical Services (IES) decided to replace its senior subordinate bonds with bank debt and benefit from interest savings. "We believed it was the right time to tap the bank loan market because our bonds outstanding became callable Feb. 1 and we didn't have any outstanding senior debt," declared Alex Csitkovits, IES' senior director of finance. "IES saw an opportunity to realize interest savings that will be accretive to our earnings," he added.
The electrical services and maintenance provider repaid $75 million of its senior subordinated 93/8% bonds with the new bank debt. The facility includes a $50 million amortizing term loan priced at LIBOR plus 2-3% and a $125 million revolver priced at LIBOR plus 13/4-23/4%. The previous revolver, which was led by J.P. Morgan and was for $125 million, was priced at LIBOR plus 13/4-3%. J.P. Morgan is not participating in the new revolver. He declined to comment on the merger between the two banks and what that may mean for the overall exposure to the company.
Csitkovits explained that although IES had no previous experience working with Bank One, the firm was chosen because it offered the best structure, enabling IES to increase the size of the line. "We had a pretty good relationship with our banks and, as opposed to mass marketing the facility, we felt comfortable going back to the previous lenders plus a select few additional ones," Csitkovits stated. "The banks' response was so good that we ended up being oversubscribed," he added. "It is important to underline that we keep a very good relationship with J.P. Morgan as it continues to be our investment bank."
The participating banks are Allied Irish Bank, Bank of Scotland, First American Bank, First Bank and Trust, LaSalle Bank, US Bank, Wells Fargo, Southwest Bank, Regions Bank, Hibernia Bank and RZB.