Carbon compound and forest products producer Koppers completed a $175 million refinancing deal, adding five new lenders in the process. The new syndicate members were added to the facility after bankers from Mellon Bank--a lead arranger on the previous deal--joined new institutions, but kept in touch with the company, said Donald Davis, v.p. and cfo of Koppers. "More than half [of the lenders] were new, but all have bankers at their institutions that know the company," he stated. He did not name the new lenders. The new leads are PNC Bank and National City Bank. "We selected them because they understand the regional needs of our company," he said. Pittsburgh-based Koppers was looking for good pricing and a strong relationship, Davis added.
Mellon is not involved in the new credit because Davis said the bank's lending strategy has changed since the old deal's origination in 1997 (LMW, 3/31). UBS Warburg was the other lead bank on the previous deal, but is also not involved in the new credit. UBS is focusing more on capital markets, he said, explaining that the bank's strategy had changed along with Mellon's. Mellon did not make a proposal, but UBS did, Davis added, not discussing the proposals further. There are 11 lenders in total on the new four-year deal. "We're delighted with the regional flare of our syndicate," he noted. A UBS spokesman did not return calls for comment.
The new secured facility includes a $100 million revolver and a $75 million "A" loan. Pricing is based on a grid tied to leverage, ranging between LIBOR plus 13/4-21/2%, Davis said. He noted that pricing was a little bit steeper than on the previous deal. This credit was priced in the LIBOR plus 13/4-21/4% range. "The market has changed considerably," he explained. The previous $275 million deal included a six-year, $140 million revolver and a $70 million "A" loan. There was also a seven-year, $65 million "B" piece, but Davis said the company no longer needed an institutional tranche in the new credit.