School Specialty has added The Royal Bank of Scotland and Associated Bank to its roster of lenders for a newly refinanced $250 million credit and expects it might conduct available non-loan business with the new banks as it has done with existing lenders. "[RBS and Associated] were active in the Midwest marketplace and we invited them to take a look at the credit," said Mary Kabacinski, executive v.p. and cfo, explaining what prompted the syndicate additions for the Greenville, Wis.-based company.
School Specialty--a direct marketer of educational products to schools and teachers--tries to do all of its fee-based business with members of its lending syndicate, added Kabacinski. Bank of America leads the new secured credit and has been the company's lead agent for the past five years since School Specialty went public, Kabacinski noted. Other lenders to the three-year revolver include U.S. Bancorp, LaSalle Bank, M&I Marshall & Ilsley Bank and Bank One.
The new facility replaces a $350 million deal that included a $250 million revolver and a $100 million term loan. Kabacinski explained that the term loan portion was paid off before the refinancing. About $115 million was drawn on the revolver as of last January, she added. The refinanced line is available for general corporate purposes and has some provisions for letters of credit. "We do acquire a lot of companies," she noted, explaining further uses for the proceeds. Pricing on the refinanced deal is LIBOR plus 2% and is tied to leverage. Kabacinski said the company's debt-to-EBITDA multiples were a little over three times as of the last published quarter.