Shurgard Europe, a Belgian self storage operator, increased its E140 million ($129 million) credit facility to E215 million ($198 million) as market conditions prevented the company from obtaining the E250 million ($230 million) facility it had originally discussed with bankers. Patrick Metdepenninghen, cfo, said the company will go back to the market this April to raise the remaining portion it was seeking with hope that conditions in the European loan market will improve by that time. "We didn't get as much as we wanted, but we will be back in April to look for another $78 million," said Metdepenninghen. He declined to discuss banks he has contacted. The credit was launched at the end of September, but syndication did not close on the facility until the end of February.
"A lot of the telecom deals fell apart around that time," said Metdepennighen, explaining that he thinks the lack of enthusiasm for the telecom sector hurt all companies concurrently in the loan market. "The reality is when people are nervous it hurts the whole market. It makes it more difficult for everyone to negotiate," he said. Credit Suisse First Boston led the loan into a syndication that yielded seven other participants and the firm was chosen by the company because Shurgard didn't want to incur expenses associated with going with a new bank to refinance the existing E140 million the company also refinanced as part of the now larger credit. "If we went with somebody else it would have been a lot more expensive," he noted. The new credit matures in 2003 and is priced at LIBOR plus 1 3/4% which Metdepennighen noted he thought was pricey for a company he described as having a strong asset base and revenue stream. But the credit does have a provision that if the company's coverage ratios improve, margins will go down, he added.