The Cooper Companies tripled the size of its KeyBank-led credit facility, adding a term loan tranche to the composition of its bank deal. The new $225 million credit, comprising a $150 million, three-year revolver and a $75 million, five-year term loan, replaces a $75 million revolver set to mature in 2006. The company needed to pay off $62 million under its existing credit line and pay £44 million in notes owed to Biocompatibles International as a result of Cooper's purchase of Biocompatibles Eyecare in February. These capital expenditures prompted a redo of its entire credit line package, said Norris Battin, v.p. of investor relations. The company tripled its size after evaluating its capital needs going forward, he noted. The credit was oversubscribed.
The new revolver is currently priced at LIBOR plus 2% and the term loan is set at LIBOR plus 21/ 4%. The rates on the revolver and the term loan may be adjusted as low as LIBOR plus 1% and LIBOR plus 11/ 4%, respectively, depending upon the company's debt to EBITDA ratio. The interest rates will be reset on July 1, explained Battin. Pricing on the former facility ranged from 1/2% to 13/ 4% as determined by certain financial ratios. The company's debt can be no more than 50% of total capitalization as stipulated by the credit agreement.
KeyBank was the lead on the former facility and the new syndicate consists of 11 banks. The Cooper Companies produces specialty healthcare products and includes the Trumbull, Conn.-based CooperSurgical and Lake Forest, Calif.-headquartered CooperVision.