Bob Votteler, v.p. and treasurer of Central Parking, is relieved that the company's $350 million credit is finally closed after some ill-timed company news last month almost jeopardized the deal's completion. "I couldn't begin to tell you how happy I am that it's done," Votteler told LMW. He explained that "sort of a perfect storm" hit the parking facility company at the time the credit was cruising en route to a done deal. A reported invoicing error that reduced earnings, the resignation of CFO Hiram Cox and a related stock decline all caused ticket-holding lenders to second guess the credit (LMW, 2/24).
The facility had blown out after launch last January with roughly $1 billion in initial commitments, Votteler said. "We actually had become quite comfortable with getting flexed down. We thought the [initially $150 million] 'B' would be at three [percent over LIBOR, and] maybe push down to 275," he said. "But after the announcement, it became clear that the market wasn't going to support that pricing," he added. The Bank of America-led credit closed with a seven-year, $175 million "B" loan priced at LIBOR plus 31/4% and a five-year, $175 million revolver priced at LIBOR plus 21/4%. Votteler said that Central Parking had originally wanted a $200 million revolver and a $150 million "B" piece. But after lender discussions and a Feb. 21 conference call with 75 market players, B of A and the company realized the need for the new structure. He added that the credit is now secured by the stock of subsidiaries, real estate and personal property. The initially proposed deal was solely secured by stock with a springing lien.
Votteler said that several investors had backed out of the credit after word of the company's news. "A lot of the 'B' guys pulled out immediately," but more than half of them came back, he noted. "The banks call it rebuilding the book," he explained of the rework process, adding that the company is fortunate to have relationships with B of A and other core banks. FleetBoston Financial, J.P. Morgan and SunTrust Bank were a part of the final syndicate. "The banks tend to be a little closer to you, [even though] their approval process might be more cumbersome," he noted.