Sirva to repay bank debt with IPO proceeds

By Sara Rosenberg

New York, Aug. 25 - Sirva Inc. plans to use proceeds from an initial public offering to repay in full its $61.1 million senior discount loan and repay $26.4 million of the outstanding debt under its term loan A, $50.1 million of the outstanding debt under its term loan B and $35 million of the outstanding debt under its revolver.

The Westmont, Ill. relocation services company estimates that net proceeds from the IPO will be approximately $230 million. Besides repaying bank debt, the company intends to redeem all of its outstanding shares of junior exchangeable preferred stock for $31.5 million, repay the $15.9 million seller notes issued in connection with the purchase of CRS and make a $10 million capital contribution to Transguard, according to a filing with the Securities and Exchange Commission.

SIRVA anticipates obtaining waivers or amendments under its senior credit facility to allow for the proposed application of proceeds.

The company obtained the $475 million credit facility in November 1999. It consists of a $150 million seven-year revolver, a $150 million seven-year term loan A and a $175 million eight-year term loan B. In connection with the purchase of CRS, North American Van Lines borrowed an additional $50 million under the term loan B.

As of June 30, the interest rate on the term loan A was 4.04%, the interest rate on the term loan B was 4.875% and the interest on the $84 million then outstanding under the revolver was 3.81%.

Credit Suisse First Boston, Goldman, Sachs & Co., Deutsche Bank Securities, Citigroup and JPMorgan are the joint bookrunning managers on the IPO.

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