US banks lend to specialty producer

A club of banks led by Wells Fargo has provided a US$225mn credit facility to a North American specialty phosphorous producer.

New Jersey-based Innophos Holdings entered into the senior secured credit facility with a five-year maturity, which also sees Bank of America Merrill Lynch as syndication agent and TD Bank as documentation agent.

The facility is split into a US$100mn term loan that amortises at 1% a quarter and a US$125mn revolving credit line with a letter of credit sub-facility of up to US$20mn.

The pricing of the facility is linked to overall company leverage and ranges from 225 to 300 basis points over Libor.

Furthermore, Innophos has the option to request another US$50mn on the revolving credit line.

By using the debt to refinance a pre-existing credit facility, Innophos’s consolidated net interest expense has been reduced by about US$11.5mn.

Neil Salmon, vice-president and chief financial officer at Innophos, remarks: “By putting this new credit facility in place, we have achieved important long-term benefits for the company.”