CSK Auto has refinanced a $150 million credit facility priced at LIBOR plus 31/ 2% to obtain more permanent financing and debt amortization relief. The new deal, led by Credit Suisse First Boston, J.P. Morgan and UBS Warburg, was upsized and includes a $170 million term loan, and a $130 million revolver, both priced at LIBOR plus 31/ 2% subject to a borrowing base formula. "We feel we received fair market pricing," said Don Watson, cfo for CSK Auto, of the facility, which closed at the end of December. Before the refinance, CSK was facing high leverage because of debt-financed acquisitions such as Rossi, Big Wheel and the PACCAR acquisitions. Marie Menendez, v.p., senior credit officer at Moody's Investors Service said without the refinancing, CSK may not have been able to meet debt payments from internally generated cash flow, she explained (LMW, 12/01).
The deal, rated Ba3 by Moody's, comes with a larger restructuring plan. The company also issued $280 million of 12% senior notes due June 2006, $50 million of 7% convertible subordinated debentures due December 2006 to select investors and converted $30 million of 7% subordinated notes into approximately 4.5 million shares of common stock. Lehman Brothers, which led the former facility with J.P. Morgan and CSFB, participated in the convertible debentures. Following the successful bond offering, the credit facility was reduced to a $300 million deal and restructured from a $325 million credit, split between a $225 million revolver and a $100 million term loan (LMW, 12/01).