Toronto-based CAE Inc. recently closed a refinancing credit that expanded its size to $440 million after the deal came in oversubscribed. Originally launched as a $390 million credit, the loan takes out an existing facility signed in 1997 and will back a three-year plan inaugurated for CAE in early 2000 to reposition the company and double net earnings by 2003, noted Robert Peck, director of investor relations.
The credit is structured as a $350 million five-year revolving credit, originally set at $300 million, with pricing based on a grid tied to Standard & Poor's ratings. The grid runs from LIBOR plus 1/2% to LIBOR plus 1%. The credit also includes a $90 million euro denominated, five-year revolver for CAE Verwaltungsgesellschaft, the German subsidiary in Stolberg. The facility fee for the North America tranche was 40 basis points, with participation fees of 75 basis points for $50 million and 60 basis points for $35 million. For the European tranche, similar pricing was set, though participation fees were 47.5 basis points for E20 million and 20 basis points for E10 million.
The bank group, led by Scotia Capital Markets, Royal Bank of Canada, Bank One and West LB, is based on existing relationships, said Peck. "There was considerably more interest than was required in the facility, while the increased amount enhances the support for the company's plans, underpinning the financial health," added Peck. The previous loan was a $220 million North American tranche and a $47 million European tranche in German Marks. CAE is a supplier of simulation systems to the aerospace, military and forestry industries, whose customers include NATO, Lockheed Martin and the Israeli Air Force.