Sioux City, Iowa-based Terra Industries extended and reduced its revolving credit facility and took the honor of being the first high-yield issuer of notes to re-enter the market last week. Francis Meyer, cfo, said the existing $225 million asset-based facility has been reduced to $175 million and extended from its maturity date of 2003 to 2005. Citibank led the old and restated facility as well as the planned $200 million senior secured notes issuance, stated Meyer. Pricing on the credit is LIBOR plus 23/ 4% with $69 million expected to be drawn on the revolver.
Terra will use the proceeds of the offering together with drawings under its new credit facility to repay $259.4 million of existing debt that was maturing in January 2003, he explained. By extending the credit facility, Terra is able to prepay parts of the facility, Meyer stated, and have financing in place for longer.
Meyer said, the bond issuance was planned for the week of Sept. 11, with all the groundwork done before that. The roadshow was completed Oct. 3, but the sale was delayed. Pricing was slightly higher on the bonds than planned, he said, but added "pricing could always be less." The facility was not too difficult to extend, he noted, since Citibank led the old line. The $200 million of 127/ 8% senior secured notes due in 2008 are priced at 99.43% to yield 13%. Terra Industries produces nitrogen products and methanol.