Mosaic Group extended the maturity of its credit facility to 2004 and reduced the commitments as the company anticipates a tougher market. "It just cleans and tidies things up in this environment," said Ben Kaak, executive v.p. and cfo. He explained that the company wanted to extend the maturity in light of what could be a tough market in the next couple of years. In exchange, Mosaic's deal was reduced to $300 million from $400 million and the pricing was increased to 215 basis points over LIBOR. Pricing had been 140 basis points over LIBOR.
Kaak says it was a worthwhile tradeoff for the company. "We never want these things looming," he said of the need to refinance. "Economists just woke up to the fact that there's a recession. It could take three years before we're out of a recession, so it was time to replace the facility. I doubt in two years we're going to be in that great shape. It gets us past that point."
Mosaic is a marketing-solutions company based in Toronto. The company kept its original lenders, CIBC World Markets and Scotia Bank. It did not go out to bid. There are a total of five banks in the syndicate.