Arkansas Best Corp. has changed the pricing on its $225 million credit to give a bit more juice to its bank group, led by long-time lender Wells Fargo Bank. "We are a very relationship-oriented company," explained David Loeffler, v.p., cfo and treasurer.
Considering that Arkansas Best has less than half of its facility drawn and it does not have much to offer in terms of ancillary business to its bank group, the company wanted to improve the pricing for its banks when it went back for a two-year extension to the line, Loeffler said. Arkansas Best increased the facility fee and decreased the usage fee for the credit. The bank debt is now set to mature in May 2007.
Both credits have an all-in spread of 1% over LIBOR. On the former credit, the facility fee was 17.5 basis points and the drawn rate was 82.5 basis points over LIBOR compared to a 22.5 basis points facility fee and 77.5 basis points spread over LIBOR under the new deal. The credit's pricing is also linked to a ratings-based grid and Arkansas Best just recently received an upgrade from BBB to BBB+ from Standard & Poor's. If the company also receives an upgrade from Moody's Investors Service, which currently rates the company at Baa3, the pricing will go down.
Well Fargo is the administrative agent and lead arranger for the facilities. "They've been really responsive to our needs," said Loeffler of Wells Fargo. "We are not going to change [the lead] as long as they continue to support us." Fleet National Bank and SunTrust Bank are the co-syndication agents. Wachovia Bank and The Bank of Tokyo-Mitsubishi are also lenders. The Norinchukin Bank is a new lender for the company coming into the syndicate through a relationship with Wells Fargo.