Jefferson-Pilot may consolidate two commercial paper backstop facilities into one $575 million credit and it will put the deal out to bid if it decides to make the move. The Greensboro, N.C.-based company will weigh the move next month because a $200 million, 364-day revolving credit facility through First Union expires in December, said Russ Simpson, v.p. and treasurer. He said Jefferson-Pilot needs to extend the facility, but has not yet determined the maturity due to the possibility of consolidating its backstops. The insurer also has a $375 million, five-year facility led by Bank of America set to mature next May. Simpson said the company will discuss with prospective banks whether it would be cheaper to combine both facilities or to maintain two separate credits.
According to Capital DATA Loanware, the 364-day revolver is priced at LIBOR plus 14 basis points and the five-year facility is 10 basis points over LIBOR. A banker at B of A said the bank would aggressively bid for the business because it believes there would be potential for underwriting assignments. Calls to a First Union spokeswoman were not returned by press time.