Credit Suisse First Boston and Salomon Smith Barney launched a $375 million term loan "B" for Terex on May 31, that will refinance existing debt and back the acquisition of Demag Mobile Cranes. A banker said the seven-year "B" loan has a spread of LIBOR plus 21/ 2%, while the company currently carries a BB-/Ba3 rating. The company's lifting equipment includes cranes, material handlers, work platforms, and similar devices for construction and industrial customers.
The company is banking on the acquisition of Demag to improve its position in the all-terrain crane market, according to a company statement. Charles Tan, an analyst at Moody's Investors Service said, on the positive side, the acquisition will increase the product offering and help them get in German and European markets. Negatives, though, are the current down cycle for the construction industry and the company is already facing integration challenges. The German economy and the European market does not look that robust, he added. Officials at the banks and company did not return calls.