Babcock Borsig Capital closed a $90 million credit facility as one of the first companies to use an online syndication platform--ClearPar --to close a bank loan.Credit Suisse First Boston led the deal. Each syndicate member had the ability to allocate the funding of the loan online and sign all documentation online as well. The entire process typically takes weeks, but was completed in one business day. "We're always trying to increase the ease of use to clients," said Howie Shams, managing director at CSFB.
"In conjunction with that combination, we retired existing debt and increased our working capital flexibility," said Nat Caruso, cfo of Babcock Borsig Capital. The company held discussions with other banks, but chose CSFB because of its track record and a previous positive relationship. Caruso said, "The result certainly is very positive."
Ellen Hefferan, ceo of ClearPar, said the overall response was positive. "People are comfortable with it," she said. CSFB has been closing its par deals with ClearPar since August, but the syndication platform is new. Shams and Don Pollard, co-head of global syndicated loans at CSFB, are optimistic that syndicating deals online will facilitate secondary trading. "People talk of making bank loan settlement more securities-like. This makes the process much easier," said Shams. The credit breaks down into a $65million term loan and a $25 million revolver.