Ecolab refinances with downsized $500 million 364-day revolving loans

By Susanna Moon

Chicago, Aug. 10 - Ecolab Inc. obtained a $500 million unsecured 364-day revolving credit facility at Libor plus 69 basis points to 127.5 bps, based on the company's credit ratings.

The facility matures in August 2013 and replaces Ecolab's $1 billion 364-day revolver that had been set to expire on Sept. 6.

Proceeds will be used for general corporate purposes and to support commercial paper issuances.

The new revolver includes an incremental expansion component that permits Ecolab to lift the commitments by up to $250 million.

The company closed the credit agreement Friday with Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Sumitomo Mitsui Banking Corp., Bank of Tokyo-Mitsubishi UFJ, Ltd. and Credit Suisse Securities (USA) LLC as joint lead arrangers, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is administrative agent. JPMorgan Chase Bank, NA, Sumitomo Mitsui Banking, Bank of Tokyo-Mitsubishi UFJ and Credit Suisse AG, Cayman Islands Branch are co-syndication agents.

The facility fee ranges from 6 bps to 22.5 bps of the average daily commitment of each lender.

At Ecolab's option, at maturity, the outstanding principal amount of loans under the 364-day facility may be converted to a term loan, which will be due in a single payment up to 12 months from maturity. Ecolab will pay a fee of 1% of the outstanding principal amount of loans under the facility that are converted into a term loan.

Under the terms, Ecolab must maintain a minimum interest expense coverage ratio.

Recent commitment cuts

The company recently elected to reduce the total amount of commitments under its 364-day credit agreement to $1 billion from $2 billion, according to a previous 8-K filing with the SEC.

The maximum amount of commercial paper that may be issued under Ecolab's U.S. commercial paper program was reduced to $2.5 billion from $3.5 billion.

Ecolab gave notice of the reductions on April 10, and they became effective as of April 13.

Bank of America, NA is the administrative agent for the credit agreement, and JPMorgan Chase Bank, NA, Sumitomo Mitsui Banking and the Bank of Tokyo-Mitsubishi UFJ are the co-syndication agents.

Ecolab is a cleaning and sanitizing company based in St. Paul, Minn.

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