Metris Companies is evaluating alternatives that could include tapping the bank loan market to deal with the June 2003 maturity for its three-year, $100 million "B" term loan. "We are looking at a number of different strategies," commented Ralph Than, Metris treasurer, explaining that potentially renewing the line is one of many alternatives. But Than noted that the issues banks are currently facing in terms of their existing credit exposures make the bank market lower on the list of priorities for companies looking to deal with their financing needs. Metris has no lead idea emerging at this point, he added.
Than stated that the credit markets are tight, but said, "There is money to be had at a price." The Metris "B" loan launched in 2000 and is priced at LIBOR plus 31/ 4%. J.P. Morgan leads the credit, but Than said if Metris decides to pursue a renewed line the company would evaluate J.P. Morgan and other banks at that time. The company has no strict timeline to when it will be making a final decision, and Than said Metris would look to choose a direction over the next couple of months. "We will take advantage of liquidity when it presents itself," he said.
Metris is a provider of financial products and services, which also issues credit cards through its wholly owned subsidiary, Direct Merchants Credit Card Bank. In addition to the term loan, the company also has an undrawn $170 million revolver. Also included in its debt portfolio are $100 million of senior notes priced at 10% due in 2004 and approximately $146 million of outstanding senior notes with a 101/ 8% coupon and 2006 maturity date.