Evergreen International Aviation is looking for new lenders, including institutional players, to complete a facility designed to refinance roughly $275 million in bank debt coming due in May. Mike Barr, Evergreen cfo, said the company is in negotiations with a number of banks and institutional lenders but is running up against the stigma currently attached to the airline industry. "We are in a situation where we are actually performing very well in an industry that has been hard hit," he said. "Our biggest problem is trying to convince people that we are not United Airlines."
The company's current credit is made up of a term loan and an operational line. While the credit is filled strictly by banks, Evergreen is pursuing the institutional market because of the type of credit it's seeking one that is relatively long-term and equipment-based. Additionally, institutional lenders don't necessarily have the same bias against anything with airline attached to it, commented Barr. Within the context of a long-term, asset-based deal, the company is open to suggestions. "We are open to any kind of structure that makes sense," noted Barr. He declined to comment on the former credit's pricing.
Bank of America is leading the new credit facility. B of A was chosen by the company's former chief financial officer, said Barr, but he speculated that the bank was selected because of its good name and strong presence in the loan market. McMinnville, Ore.-based Evergreen is a privately held company with customers ranging from other air carriers and aviation companies to governmental agencies. The company provides services that include specialized helicopter services, air cargo transportation, aircraft maintenance and repair, as well as aircraft sales and ground logistics.
Standard & Poor's currently rates the credit at B+ but placed it on CreditWatch negative because Evergreen was unable to secure the entire $148.5 million amount of loan guarantees it requested from the Air Transportation Stabilization Board. Instead, Evergreen was only able to receive $90 million in guarantees and S&P believes the company will have to change its financing proposal. The rating agency does note, however, that Evergreen has been able to remain profitable due to increased military flying.