Accuride Corp. has completed an amended and restated $342 million bank credit in order to refinance expiring debt, extend amortization and soften covenants during a time of weak demand for the truck and trailer wheel manufacturer and supplier. Accuride revised the deal to reflect the continued weak economic downturn for the company's sector, said John Murphy, executive v.p. of finance and cfo.
The new deal minimizes amortization payments to $2 million per year in 2004 and 2005. Also, the credit improves the company's total liquidity to about $70 million with $41 million in unused revolver capacity on the new three-year, $66 million revolver. The facility also includes a four-year, $180 million second lien term loan that refinanced Accuride's previous "A" and "B" loans. A $96 million "C" term loan also remains outstanding and was carried over from the previous deal with the same terms, pari passu to the revolver.
Citigroup and Lehman Brothers lead the credit. Citi was a previous relationship for the Evansville, Ind.-based company, while Lehman is a new relationship, Murphy said. "We thought it was good to strengthen our bank group" with Lehman, he added, noting that Lehman's deal structure suited Accuride's needs extremely well. In addition, GE Capital joined the new facility. Deutsche Bank was involved in the old and new deals as an agent. Murphy said the term "C" players in the tranche are not new. Original ticket holders for the "C" piece include Apex CDO I, First Dominion Funding and the ARES Leveraged Investment Fund.
Pricing on the second lien loan is LIBOR plus 61/4% with a 2% LIBOR floor and an original issue discount of 2% (LMW, 6/2). Murphy said the tranche was well received in the market. He added that Accuride chose this structure and type of debt because it was a "more attractive alternative than bonds. We felt it was more economical." The revolver is priced at LIBOR plus 4%. "We thought that pricing was competitive," he said.