Palo Alto, Calif.-based CNF, watching the game of banking mergers and musical chairs, chose Bank of America to lead a new five-year revolving credit facility because of the personnel still in place at the bank. The B of A deal replaces one led by J.P. Morgan. "The banking community has changed considerably in the last five years," said Marc Thickpenny, v.p. and treasurer. "J.P. Morgan no longer exists as the same bank and so the top four or five lenders on the credit were asked to pitch for the new lead. Despite the mergers the people at B of A are the same people as four or five years ago. We also looked at who had provided the most credit over the years and B of A have done that." Since J.P. Morgan merged with Chase Manhattan Bank, the people and institution are very different, he said.
The new J.P. Morgan is syndication agent on the nine-bank syndicate, with ABN AMRO, Citibank and PNC Bank as documentation agents. He explained the company has nine new participants in the syndicate as it expected some of the banks to opt out.
CNF, a global supply chain services firm, wanted a five-year revolver, which is at odds with the wishes of lenders, said Thickpenny. "The banks prefer to have one-year agreements as a result of increased focus on capital commitments and returns," he noted. "They have to set aside more regulatory capital for a five-year" deal, he said, and with fewer banks in the market sensitivity has increased. CNF did not want to renegotiate every year though, Thickpenny said. He declined to comment on whether or not the company paid up in pricing for the longer maturity. The pricing on the credit is not being disclosed.