Vancouver-based Intrawest, a developer and operator of ski and golf resorts, has received a $300 million, three-year credit facility that should fulfil its needs, despite dim prospects for the leisure industry. Stephen Forgacs, manager of investor relations, said, "Intrawest is fairly unique in the resort industry, since 80-85% of business arrives by car." The downturn in the economy has so far not hit Intrawest, he believes, with figures for pre-sale real estate already hitting 80% of analyst's expectations for the fiscal year.
The new line is led by Scotia Capital, with US Bank as syndication agent and HSBC and Deutsche Bank as co-documentation agents. The previous lines, which included a $200 million line and a $60 million term loan both led by Scotia, were maturing, the larger one in January 2002, said John Currie, senior v.p., financing and taxation for Intrawest. The rationale is not low interest rates, as this is a floating rate facility, he noted, declining to comment on the spread on the new or old lines. "We did not put the role of lead agent out for bid because we worked with the lead banks as an evolutionary process over the years to design the facility. They know our business, and we know and work well with them. These relationships are what provided us with what I believe are the best terms available in the market," Currie stated. According to bankers, pricing is LIBOR plus 2 1/4%.
Intrawest also completed a private placement of $125 million, 10.5% senior notes due February 1, 2010. "Bank debt is shorter term, lower rate and provides significant flexibility as the banks know us and know our business and are able to tailor the facility," Currie commented. The public debt issue was led by Deutsche Bank.