U.S. Xpress Enterprises opted for an asset-based loan from Fleet Capital after the terrorist attacks in September forced the company to abandon a SunTrust Bank-led term loan. Last fall the truckload carrier was looking for a $150 million term loan "B" and a $75 million revolver, but after Sept. 11 capital dried up, explained Ryan Rogers, director of investor relations for U.S. Xpress. Instead U.S. Xpress used the $100 million five-year senior secured loan and an equipment financing deal to refinance existing debt, he said.
In December the company raised $107 million in equipment financing, using specialty lenders, Rogers explained. Then, at the beginning of April, U.S. Xpress closed on the new $100 million ABL revolver. "We decided to go with Fleet to get an asset-based loan. SunTrust still does some swaps and cash-management business with us, but Fleet has an ABL background and SunTrust does not," he added. This is a better opportunity in the market, as the company has large accounts' receivables, he explained. Pricing is 23/ 4% over LIBOR and availability is based on eligible receivables and revenue equipment. Pricing on the "B" was intended to be LIBOR plus 31 /4 %. Other lenders on the credit are LaSalle Bank and CIT Group. "The asset-based loan structure of this facility should provide the company with increased liquidity and flexibility to execute their business plan," said Fleet Capital senior v.p., Robert Rubino.