Genesee & Wyoming is boosting its borrowing capacity in anticipation of future acquisitions and has tapped Fleet National Bank for a new $250 million credit. "We are an acquisition-driven company, and it's important to have debt capacity because of cash deals," said Jack Hellmann, cfo. The railroad operator recently announced plans to acquire Utah Railway, a division of Mueller Industries, for $54 million in cash drawn from an existing $103 million revolver, but Hellmann declined to disclose any information related to future acquisitions.
Fleet leads the existing revolver and a $32 million term loan, both of which will be refinanced by the new $250 million facility. Genesee & Wyoming has a long established relationship with the bank that extends over several years, Hellmann noted, adding that the Greenwich, Conn., railroad conglomerate has been fond of the agent's transportation lending practice since its BankBoston days.
Hellmann would not yet divulge details of the new senior credit facility, except that it will be secured by all of the company's U.S. and Canadian assets. Genesee & Wyoming will have approximately $150 million of unused borrowing capacity under the new facility, with the other $100 million earmarked to refinance existing debt, he noted. Syndication of the facility is slated to begin soon after the Utah acquisition closes, which is expected to occur at the end of third quarter. Officials at Fleet declined to comment.