Columbus McKinnon expects new credit facility within 45 to 60 days

By Sara Rosenberg

New York, May 21 - Columbus McKinnon Corp. is currently in negotiations for a new credit facility, which is anticipated to be in place within the next 45 to 60 days, according to a company press release.

The new loan is expected to be smaller than the current one since company needs are less than they were when the existing loan was obtained, company officials said during a conference call Tuesday. Presently, the company is using the same lead bank - Fleet National Bank - and anticipating a smaller syndicate, officials added. The length of the facility will probably be around three years.

Typically interest rates have been based on a grid, and the company is expecting that the new facility would be no different. As operations improve, the spread on the loan will decrease, but it's too early to tell what the spread on the new loan will be, officials said in the conference call. The interest rate on the existing revolver is Libor plus 350 basis points.

The current revolver provides availability of up to $225 million and is due on March 31, 2003. At Dec. 30, 2001, there were outstanding borrowings of $145.8 million under the revolver. The loan is secured by all equipment, inventory, receivables, certain real property, subsidiary stock and intellectual property, according to a filing with the Securities and Exchange Commission. There is currently no availability on the current facility, officials said in the conference call.

As of March 31, the company was not in compliance with certain financial covenants under its current senior bank loan due to the sale of its ASI business. This noncompliance will be dealt with shortly and a waiver will be obtained, company officials said.

Columbus McKinnon, based in Amherst, N.Y., is a broad-line designer, manufacturer and supplier of sophisticated material handling products and integrated material handling solutions that are widely distributed to industrial and consumer markets worldwide.

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