Katy Industries obtains $110 million credit facility

By Sara Rosenberg

New York, Feb. 4 - Katy Industries Inc. obtained a new $110 million credit facility consisting of a $20 million term loan and a $90 million revolver. Fleet Capital Corp. was the agented the deal.

Interest on the new loan is based on the company's leverage, however, the company declined to reveal the spread over Libor range.

The new facility replaces a $140 million loan, which had consisted of a $30 million term loan and a $110 million revolver. The syndicate of banks participating in the new credit agreement consists entirely of banks who had participated in the syndicate from the former credit agreement.

Proceeds from the term loan were used in part to redeem early, at a 40% discount, $16.4 million of an 8% preferred interest in Katy's largest subsidiary, Contico International, LLC, according to a news release. The remaining proceeds from the term loan will be used to pay down revolver debt.

"The completion of the refinance of our credit agreement will reduce our finance costs by approximately $1 million annually," said C. Michael Jacobi, president and chief executive officer, in the release. "The additional borrowing capacity created by the remainder of the term loan proceeds will be a key source of liquidity as we work through a period of restructuring several of our businesses in 2003."

Katy is a Middlebury, Conn. is involved in two operating groups of electrical/electronic and maintenance products in which it manufactures electrical tools and accessories and professional cleaning supplies.

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