Bucking the trend of issuers who have come to the institutional market as pro rata lenders pull back, Greater Media has refinanced a $200 million revolver into a larger pro rata deal with new relationship lenders, explained Ed Nolan, Greater Media's v.p. of finance. These new banks include SunTrust Bank, Rabobank, Citizens Bank, Credit Lyonnais, Sovereign Bank and Allfirst Bank. Nolan said the success of the deal was due to the company's good properties, low leverage and conservative management. "We looked like a relatively clean deal," said Nolan. The facility is in place for potential acquisitions, although Nolan said there is currently nothing in the pipeline.
Commenting on the issue of the tightening in the lending market and a pursuit by banks of ancillary business alongside provision of credit, Nolan said the company would try to spread its financial service needs amongst its bank group without signing up for more issues than the company needs. "We will work with the lenders to increase the value of the relationship," he said. Ancillary business for the company includes interest rate swaps, short-term money management, and the operation of its bank accounts. The facility is led by Bank of New York. Bank of America, FleetBoston Financial and Wachovia Bank signed onto the deal as co-agents. Union Bank of California, a long-time relationship bank, also participated. The deal consists of a $150 million revolver and $125 million "A" term loan.
The new facility is priced at LIBOR plus 11/ 2% compared to a previous spread of 1% over LIBOR.