AMSTED Industries has completed its first "B" loan as a part of a new $545 million credit facility. The new loan comprises a $425 million, seven-year "B" piece and a $120 million, five-year revolver. It replaces the company's former $1 billion credit facility that was set to mature next year. AMSTED decided to refinance a year earlier to capitalize on the opportune conditions in the credit markets, said Matthew Hower, treasurer of AMSTED. "They had money and we needed it," Hower commented on using the institutional loan market for the first time.
AMSTED's former credit was syndicated in August 1999 and included a $600 million revolver and a $400 million "A" loan. Hower explained that the company had paid down its debt over time and did not need the large revolver it had in the past. In addition, because the company decided to tap the "B" loan market, AMSTED faces less amortization on this piece of debt than it did on its former "A" loan, Hower said. He declined to elaborate on the pricing for the new and former credits.
Citigroup and Bank of America lead the new loan. Hower said the lenders are relationship banks and both held lead roles on the former facility. AMSTED is a diversified manufacturer of industrial components serving primarily the railroad, vehicular, and construction and building markets.