Matson gets $375 million five-year revolver as part of spinoff plans

By Susanna Moon

Chicago, June 7 - Matson Navigation Co., Inc. obtained a $375 million five-year revolving credit facility Monday with Bank of America, NA as agent and First Hawaiian Bank as syndication agent, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch and First Hawaiian Bank are the lead arrangers and book managers.

Matson has the option to increase the facility by $75 million.

The facility also provides for a $100 million sublimit for the issuance of standby and commercial letters of credit and a $50 million sublimit for swingline loans.

Interest on the loans is Libor is plus a spread of 150 basis points to 250 bps based on the company's ratio of debt to total adjusted asset value. The initial spread is 150 bps. The commitment fees are 15 bps to 35 bps.

Alexander & Baldwin Holdings, Inc. said its wholly owned subsidiary Matson Navigation entered into a series of debt financing agreements on behalf of Matson, Inc. as part of the previously announced plan to separate the company's transportation and land businesses into two publicly traded companies, the filing noted.

Matson expects to draw about $75 million from the facility immediately following the separation, according to a company press release.

The initial draw on the facility and proceeds from $170 million of new senior notes will be used to repay an existing revolver, to fund a contribution to Alexander & Baldwin as part of the separation and to fund the general corporate purposes of Matson.

The separation is set for completion early in the third quarter of this year or as early as the end of the second quarter.

Matson and some other subsidiaries will become guarantors under the Matson, Inc. notes.

The financing helps set up the move for Matson to become a standalone company, Matt Cox, president of Matson Navigation, said in the release.

"As an independent company, Matson will be well capitalized, with a strong balance sheet and credit profile, thereby providing stability and the financial flexibility to pursue future growth opportunities."

Added Joe Wine senior vice president, chief financial officer and treasurer of Alexander & Baldwin Holdings, Inc. and senior vice president and chief financial officer of Matson Navigation, "Matson has achieved successful long-term debt financing agreements at a time when long-term rates are near historic lows."

"With the exception of the existing Title XI debt, Matson's debt structure will be unsecured and all long-term debt will be amortizing, which will allow Matson to avoid large bullet debt maturities. Additionally, the new revolving credit facility will enhance Matson's liquidity profile and provide financial resources to continue to fund our future operational and growth initiatives," Wine said.

Matson is a U.S. carrier based in Oakland, Calif. Alexander & Baldwin is a ocean transportation and logistics services company based in Honolulu, Hawaii.

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