IMC Global is seeking a $500 million credit facility to pay down an existing $800 million credit. Company officials are also currently on a road show to issue $500 million in bonds, to pay down existing debt. The new deal will break down into a $250 million revolver and $250 million term loan "B". The loan deal mature in five years. According to Dave Prichard, v.p. investor relations, the new deal has more flexible covenants as compared to the existing facilities. "We view the financing as something that will improve our flexibility with more relaxed covenants," he said. The Lake Forest, Ill.-based company makes fertilizer and livestock feed.
IMC sought the financing to pay off $250 million in short term debt that's due this fall as well as $550 million of long term debt due in December 2002. The company also has $200 million in senior notes to pay off.
Goldman Sachs and J.P. Morgan Chase are the lead arrangers. The company went out to bid and got a number of proposals. "We'd had a relationship with J.P. Morgan Chase in the past. With Goldman Sachs, we had no prior relationship, but we felt we should establish one," Prichard said. Pricing is expected to flex up 25 basis points to LIBOR plus 2 1/2 % on the revolver and LIBOR plus 3 1/4 % on the term loan. Bank of America leads the existing credit facility, "We assumed with the new financing we needed a relatively brand new group of banks," Prichard explained, declining to elaborate.