Packaged Ice, the largest manufacturer of packaged ice in the U.S., has switched lead lenders to Ableco Finance for a new $88 million credit facility after seeking better terms on the loan. David Goldman, v.p., corporate development, said Ableco is able to offer more flexible terms than the major commercial banks as they are a specialist financing shop. "The specialist financing shops generally have higher fees than the large commercial banks, but the interest rates are comparable," he said. Goldman declined to name the commercial bank, but Capital Data Loanware cites the previous lender as Bank of America. Calls to B of A were not returned by press time.
"The loan is a like-for-like replacement," he said, split between a $50 million term loan and a $38 million revolver. Packaged Ice did not go out to bid, but became acquainted with Ableco some time ago, Goldman said. The previous loan was signed last year and was only set to mature in 2004, but Packaged Ice wanted a more favorable deal. The loan has increased flexibility through an improved covenant structure, Goldman said. The ratios are better, he noted, and there are no longer any interim principal payments. Goldman said the loan takes on a balloon structure whereby payments are made at maturity. The loan matures in October 2004, he noted, but he declined to comment on the old or new spreads. According to Loanware, the spread on the old loan was LIBOR plus 31/ 4%.