Global Imaging Systems, a provider of office technology solutions to middle-market businesses, recently completed a debt overhaul that included a $230 million credit facility and a $57.5 million convertible senior subordinated note issuance. The company directed a portion of the proceeds from the credit facility to redeem $100 million of 103/4% high-yield notes. Altogether the transactions allowed Global Imaging to take advantage of the favorable interest rate environment to replace high-priced debt, extend maturities and reduce debt, said Ray Schilling, senior v.p. and cfo. "Debt is [now] less a piece of the balance sheet," he noted.
Schilling said Tampa, Fla.-based Global Imaging considered at least eight institutions for the overhaul, but ultimately settled on Wachovia Securities, which was the administrative agent on the company's prior facility as First Union Bank. He noted that the company had confidence in Wachovia's ability to execute the deal from previous experience. He added that the bank's capability to complete both the convertible and the senior debt transactions factored into the company's decision. The timing of the transaction had a lot to do with the favorable conditions in the convertible bond market, he explained.
The new credit includes a $140 million, six-year term loan and a $90 million, five-year revolver. The term loan is priced at LIBOR plus 3% and the revolver is priced against a leveraged-based grid, ranging between LIBOR plus 21/4-23/ 4%. Global Imaging's previous $250 million credit comprised a $150 million revolver and a $100 million term loan. The term loan was priced at LIBOR plus 31/4% and the revolver was priced comparably to the new revolver.