Lafarge North America, a supplier of building materials, has obtained a new $600 million credit facility replacing a $300 million, five-year revolver set to mature in December 2003 along with a $300 million, 364-day commercial paper backup line. The company needed to refinance its commercial paper back up line, so it decided to take the opportunity to secure the five-year revolver until 2007. "I know that I have a commitment for that amount of money for years into the future," said Kevin Grant, company treasurer, reflecting on the importance of the five-year line. "For cyclical companies that is important."
The new credit comprises a $300 million, 364-day revolver and a $300 million, five-year revolver. Grant could not disclose the exact pricing, but he said he was happy that the price increase was minimal and consistent with the current credit environment. "We shopped the deal among our relationship banks," he said. "The pricing was very tight."
Citibank and Wachovia Bank lead the deal, and BANK ONE, BNP Paribus, and SunTrust Bank are co-managers. "It is very much a relationship bank group. We have had relationships with all of them for ages," explained Grant. The credit was oversubscribed by 20% but there was no flex down on the pricing or change in size on the credit. Grant said the company found the pricing reasonable and looks more to foster its bank relationships.