Krispy Kreme Doughnuts has completed a new $150 million credit facility, consolidating and modernizing several credit arrangements that were put in place three-to-four years ago. The consolidation will lead to administrative ease and efficiency in managing credit relationships, according to Randy Casstevens, cfo and treasurer of the doughnut company. "They are now under one umbrella," he said. The company continues to look at acquisitions and franchising and part of the new loan could be used for expansion as well as general corporate purposes, Casstevens said.
The company talked internally about the best way to restructure its credit needs and interviewed different banks to be the lead, he said. Wachovia Securities was selected as the lead arranger and BB&T Capital Markets as the co-arranger. The company has an existing relationship with Wachovia. "As we interviewed, we were impressed with the Wachovia team and their capabilities," Casstevens said. "They really understood our business and their presentation reflected that." Casstevens chose not to comment on the other banks that made bids. Other lenders include Bank of America,Scotia Capital, CIBC World Markets and Royal Bank of Canada.
The loan includes a $119.3 million revolving credit facility. The drawdown on the revolver replaced two separate agreements with BB&T. The company had a $40 million revolver as part of the old loan and two of its consolidated joint venture partners had separate revolvers with BB&T. A $30.7 million term loan replaces an existing term loan of the same amount with Wachovia for a mix and distribution facility in Effingham, Ill. Casstevens also noted the refinancing of the multiple lines made sense since rates are attractive. The loan is priced at LIBOR plus 11/4%, but can be adjusted based on performance.