National City Bank is launching a $225 million loan for Warren, Ohio-based Stoneridge, a designer and manufacturer of electronic components for the automotive industry. The loan will consist of a five-year, $125 million revolver priced at LIBOR plus 3% and a $100 million, six-year term loan "B" priced at LIBOR plus 3 1/2 %. The revolver contains a possible $50 million increase through an accordion feature. Proceeds from the new credit facility will be used to pay down an existing $425 million credit agreement. National City Bank is the lead on the existing credit, DLJ Capital Funding is the syndication agent and PNC Bank the documentation agent.
Stoneridge is also planning to sell $200 million in senior subordinated notes due 2011. The proceeds from the notes will pay down current debt and provide working capital, said an official at Stoneridge. Calls toKevin Bagby, v.p. and cfo of Stoneridge, were not returned. Moody's Investors Service has assigned a Ba3 rating to the new credit facilities and a B3 rating to the note issuance. The ratings reflect a number of negative market trends, which in combination with the high operating leverage, has resulted in lower revenues over the last year.