InfoUSA secured lower interest rates and increased financial flexibility on a best-efforts $110 million credit facility with Bank of America as its new lead lender. The company refinanced a Deutsche Bank-led $195 million credit well ahead of its maturity date in exchange for better terms. "We felt that we could achieve a more beneficial rate structure and covenant flexibility if we went out and shopped the deal," explained Tim Hoffman, v.p. of finance for infoUSA. Deutsche Bank, preferring to have the "name plate" rather than a supporting role, did not participate on the new syndicate, said Hoffman, noting the split was cordial.
The new credit comprises an $18 million, three-year revolver and a $47 million, three-year term loan "A" both priced at LIBOR plus 21/ 2%. In addition, there's a $45 million, four-year term loan "B" priced at LIBOR plus 3%. Hoffman noted the credit facility is linked to a leveraged based grid and that the company is close to inching up to a LIBOR spread of 21/ 4% on its pro rata piece. In comparison, at the time of the refinance the company's former credit comprised a $30 million, seven-year revolver and a $65 million, five-year term loan "A" both priced at LIBOR plus 31/ 2%. The term loan "B" was a $100 million, seven-year deal priced at LIBOR plus 4%. "Across the board it was a 1% difference," said Hoffman.
The relaxed covenants of the new agreement provide the company with flexibility in terms of future acquisitions as well as the ability to repurchase its 9 1/2% senior notes and its company stock. The company hopes to pay out this new facility before its maturity date. "We are very cash conscious and ideally we would like to prepay our debts," said Hoffman.