Fleet Capital dislodged Wachovia Bank as lead lender to Russell Corp. when it syndicated a $325 million credit facility for the athletic sportswear company last month. "Russell needed to replace the old credit line within 12-18 months and the strength of the markets made it a very good time to do this," said Thomas Johnson, director of investor relations for Russell. Johnson declined to name the old lead bank, but said, "We liked what we saw in the proposal. Good pricing, terms and their ability were the reasons to switch to Fleet." Explaining the timing of the refinancing, he added, Russell was aiming to trim interest costs, term out debt and increase operating flexibility.
Wachovia is now co-agent on the loan, alongside GE Capital. CIT Group and Bank of America are co-documentation agents and J.P. Morgan and SunTrust Bank took co-syndication roles, said a banker. The $325 million credit line, which comprises a $300 million revolver and a $25 million term loan, will refinance existing debt and is priced at LIBOR plus 21/ 2% and LIBOR plus 3%, respectively.
Fleet Securities also led a senior note offering in order to term out the debt, said Johnson. Strong appetite in the market led to a $50 million upsize on the notes. "Russell went out for $200 million, but this was upsized to $250 million, with pricing of 9 1/4 %," said Johnson. The credit facility, meanwhile, was downsized by $50 million. "The bond market is real strong, enabling us to get a good rate and more longer-dated paper," he added.