Compass Minerals, an Overland Park, Kan., producer and marketer of salt and specialty potash, paid off $20 million of its $150 million "B" loan in June and is planning another $10 million payment this month. "At the financing roadshows, the stated goal was to pay down debt," saidRodney Underdown, cfo. In the first quarter of this year, Compass paid down almost $40 million off its $135 million revolver, he noted.
The ability to stick to what was said at the investor meetings has not been hampered by the weather conditions, Underdown noted. "We had a mild winter and that hurts us," he stated. "But the business is scaleable, and we reduced capital spending and headcount to prudent levels." Also, required amortization is minimal--about $1.5 million per year, he added.
The "B" loan is led by J.P. Morgan and was originally $225 million at the time of Apollo Management's acquisition last year. But in April, Credit Suisse First Boston was tapped by Compass to issue $75 million of senior subordinated notes in order to extend maturities, stated Underdown. The addition of the subordinated debt enabled $75 million to be taken off the bank debt and a corresponding cut in the spread from LIBOR plus 31/ 2% to LIBOR plus 23/ 4%, he added.