Wachovia Bank's originally planned $355 million credit for Pilot Travel Centers has been reduced to a $250 million revolver, with a proposed bridge loan eliminated. The $105 million, one-year bridge loan was intended to back Pilot Travel's $190 million acquisition of Williams TravelCenters, explained Jeffrey Cornish, v.p. of finance and cfo. However, the company axed the bridge loan after delaying the close date for the transaction. The acquisition was originally scheduled to close by the end of 2002. The delay allowed Pilot more time to complete an $85 million private placement deal led by J.P. Morgan, he said. He noted that there had been commitments on the proposed bridge.
The acquisition will now be financed through a combination of proceeds from the revolver and the notes, Cornish stated. The add-on private placement debt now totals $285 million. The revolver will refinance Pilot's existing $210 million revolver, he said. Cornish would not divulge final pricing on the new credit, but he said it was based on a grid and was comparable to this previous revolver. Pricing on Pilot Travel's previous facility has been pegged at LIBOR plus 11/ 2%. Cornish declined to disclose how much of the revolver would specifically be tapped for the transaction. Wachovia bankers declined to comment.
The credit and the private placement add-on are expected to close next week. "It was very well received," Cornish noted, adding that the revolver is presently oversubscribed. Wachovia will cut allocations rather than hike up the capacity on the revolver, he added. Pilot Travel is half-owned by Knoxville, Tenn.-based Pilot Corporation and half by Findlay, Ohio-based Marathon Ashland Petroleum. Pilot Travel operates the country's largest travel center network with 236 locations in 37 states featuring food chains and fuel islands. The Williams acquisition asset package will add an additional 60 travel centers in 15 states. The transaction is set to close this quarter.