Agricore United has refinanced its existing bank debt with a C$500 million (US$319 million) secured credit facility and has added a separate US$70 million secured facility through John Hancock Life Insurance. The John Hancock facility provided the Winnipeg, Canada, supplier of crop nutrition and protection products with additional term debt to reconcile its out-of-sync asset-to-loan levels, said David Carefoot, managing director of corporate finance. Agricore also needed the additional 13-year loan because the larger facility does not provide enough capacity to refinance the company's mix of long- and short-term debt, he explained.
The larger facility, which is provided by a syndicate led by Scotia Capital, consists of a C$350 million revolver expiring in February 2004 and a C$150 million term loan maturing in 2007. The credit replaces a C$300 million revolver, the maturity of which was extended to this month, and a C$150 million term loan set to expire in December 2003. Carefoot declined to disclose pricing on the new credit until the expected November closing, but he noted that it is in line with the market.
In addition to the existing term loan, Carefoot noted that Agricore had about C$150 million outstanding on the expiring revolver. After refinancing the roughly C$300 million in borrowings, the remainder of the bank debt is available for general working capital purposes.