Washington Group International has completed a $350 million credit, which allows the company to save about $9 million a year in interest expense and extend the maturity on a former facility that was set to expire in June 2004. The new four-year facility comprises a $115 million "A" tranche and a $235 million "B" piece, but both loans function as revolvers, explained Earl Ward, Washington Group's v.p. and treasurer. Ward declined to comment on the pricing on the company's loans.
As a provider of integrated engineering, construction, and management solutions for businesses and governments, Washington Group is often required to provide performance and surety bonds to customers under fixed-price contracts. The new credit is primarily a backstop for letters of credit, which back up the bonding agreements, Ward explained. Through the new facility, the company is able to demonstrate that it has strong liquidity, which is important in the engineering business, said Jack Herrmann, Washington Group's v.p. of corporate communications.
The former facility was also a $350 million, 30-month loan that was put in place to support Washington Group's exit from bankruptcy in January of last year. Only letters of credit were drawn against this facility. Credit Suisse First Boston holds the role of administrative agent, sole lead arranger and book manager for the deal. Ward explained that the bank has a long-standing relationship with the company and has a particular presence in Washington Group's industry. "They are a major bank player in our marketplace," he said. LaSalle Bank is the documentation agent and Ableco Finance is the syndication agent.