Deutsche Bank, Bank of America, Morgan Stanley and Citibank held an institutional bank meeting last Thursday for Silgan Holdings, a consumer-goods packaging producer. "Silgan is refinancing the senior secured credit facility to take advantage of the current climate and investor enthusiasm for the paper," said Harley Rankin Jr., executive v.p. and cfo of Silgan. The new bank loan is $800 million, comprising a $400 million six-year revolver, a $100 million "A" term loan due 2008, and a $300 million "B" term loan also maturing in 2008. He declined comment on the bank line spread, but a banker said pricing is LIBOR plus 2% on the pro rata and LIBOR plus 21/ 2% on the "B" loan. There is also a $250 million uncommitted term loan facility. Deutsche Bank is the administration agent and B of A is the syndication agent.
"The maturity date is 2003 for the current bank lines, which means they are not staring us in the face, but the current market is extremely favorable," Rankin noted. A $200 million note offering priced on Tuesday at 8.1%, he remarked, which is 0.9% lower than the existing notes. The ratings agencies have reacted positively to the company's recent performance, with Standard & Poor's revising Silgan to positive. The rating is BB-. "We have a very good record of stable cash-flow, have been paying down debt and the interest and debt to EBITDA ratios have improved," Rankin commented. The refinancing will also increase the financial flexibility, he added.
Silgan Redux Hits Market
Deutsche Bank, Bank of America, Morgan Stanley and Citibank held an institutional bank meeting last Thursday for Silgan Holdings, a consumer-goods packaging producer. "Silgan is refinancing the senior secured credit facility to take advantage of the current climate and investor enthusiasm for the paper," said Harley Rankin Jr., executive v.p. and cfo of Silgan. The new bank loan is $800 million, comprising a $400 million six-year revolver, a $100 million "A" term loan due 2008, and a $300 million "B" term loan also maturing in 2008. He declined comment on the bank line spread, but a banker said pricing is LIBOR plus 2% on the pro rata and LIBOR plus 21/ 2% on the "B" loan. There is also a $250 million uncommitted term loan facility. Deutsche Bank is the administration agent and B of A is the syndication agent.
"The maturity date is 2003 for the current bank lines, which means they are not staring us in the face, but the current market is extremely favorable," Rankin noted. A $200 million note offering priced on Tuesday at 8.1%, he remarked, which is 0.9% lower than the existing notes. The ratings agencies have reacted positively to the company's recent performance, with Standard & Poor's revising Silgan to positive. The rating is BB-. "We have a very good record of stable cash-flow, have been paying down debt and the interest and debt to EBITDA ratios have improved," Rankin commented. The refinancing will also increase the financial flexibility, he added.