Citigroup, Deutsche Bank, and Bank of Nova Scotia have joined joint leads Bank of America and J.P. Morgan Chase as agents on a $1.7 billion credit for Southfield, MI-based Lear Corporation. Cameron Hitchcock, treasurer, said he is satisfied with general syndication on the loan and he expects it to close on March 21. Hitchcock said the company went with Chase and B of A as the company has longstanding relationships with each bank. "They are ranked number one and two in jumbo syndication," he noted.
Hitchcock explained the credit will replace its existing $2.1 billion credit that is maturing in September. "We downsized because we don't need the availability," he said, noting that the loan was increased two years ago to $2.1 billion to fund the acquisition of United Technologies Automotive. The new facility will be a five-year revolver with draw down pricing at LIBOR plus 1 1/2%. Hitchcock noted that even in a tough pro rata market he thinks his company will have no problem getting the deal done. "We didn't need to access the term loan market to get it done. It's an increasingly expensive market and there are more terms and restrictions, so why do it if you don't have to?" he said.
As part of the deal, pricing will also increase on a separate outstanding $950 million credit that comprises a $500 million revolving credit and a $450 million term loan. Hitchcock noted that pricing will tick up a few basis points to match the other facility at LIBOR plus 1 1/2%. "Many lenders are the same lenders on the other loan so it is the right thing from a lenders point of view. Both credits have equivalent risk."