Credit Suisse First Boston and Salomon Smith Barney are in the market with a new seven-and-a-half year, $210 million "C" term loan for Terex. The loan is priced at LIBOR plus 2 1/2% and backs the company's $270 million acquisition of Genie Holdings. The incremental tranche was launched by CSFB and Salomon on Sept. 17, according to Kevin O'Reilly, v.p. of investor relations for Terex. In addition to the loan, which is rated Ba3, $65 million in Terex common stock will be used to cover the Genie transaction, with Westport, Conn.-based Terex assuming $195 million of Genie's debt.
Terex announced plans to acquire the aerial work platform company in July in order to diversify its product offerings and strengthen its market share position. "The offer arose at a good part of the [construction equipment sales] cycle, and there's a lot of upside opportunity at Genie," O'Reilly commented. Genie reported $575 million in revenues for 2001. "We're anticipating a general free cash flow of $80-$100 million in 2002," O'Reilly added.
The add-on will join the construction equipment manufacturer's existing secured bank credit facility, which has a $375 million "B" piece and two revolvers. O'Reilly said the "C" tranche, scheduled to mature in December 2009, will be secured by all of the company's assets. He added that syndication would probably be determined by the end of this week, however he declined to comment on potential takers of the paper. The seven-year "B" piece closed in June, pricing at LIBOR plus 2%, and backed Terex's acquisition of Demag Mobile Cranes (LMW 6/9). Terex also has two five-year revolvers, both put in place for general corporate purposes. Terex's total debt pro forma is $1.5 billion, while its senior bank debt pro forma stands at $720 million, stated O'Reilly. He also said that Terex holds roughly $750 million in bonds.