Kansas City, Mo.-based American Italian Pasta switched from Deutsche Bank to Bank of America for a new $300 million, five-year revolver backing the acquisition of seven pasta brands from Borden Foods. Wendy Coffey, director of investor relations, said "B of A is the number one syndicator out there. Deutsche Bank is closer to number ten. We knew that B of A could get the job done and they did." A spokesman for Deutsche Bank rejoined, "in arranger league tables Deutsche Bank is between four and six placed on any given day and Bank of America is third."
Coffey explained that the $300 million revolver finances the all-cash acquisition of the brands totaling $67.5 million and refinances the old Deutsche Bank credit that had $140 million drawn on it. The previous loan, comprising a $125 million revolver and a $65 million multi-currency add-on facility was also nearing maturity, she added. Coffey noted that the interest spread is very good for the largest maker of private-label pasta in North America.
The new $300 million revolver includes $100 million of dual currency availability in euros or U.S. dollars to finance the company's business in Italy, said Coffey. The flexibility of being able to pass into or out of the line and the availability of euros and dollar made the revolver the most suitable form of financing, she added. Pricing is LIBOR plus 11/ 4%, compared to LIBOR plus 1/2% on the old facility and BANK ONE and Firstar Bank took documentation and syndication agent roles respectively. According to CAPITAL DATA Loanware, Wells Fargo, Key Bank, Credit Agricole and Wachovia Bank participated.