Chase Manhattan has completed syndication for the financing of a $250 million loan to Great Lakes Chemical.
The credit refinances a $190 million loan made earlier this year to the Indiana-based company.
The specialty chemical manufacturer is getting a reduction in price and an extension in addition to the extra $60 million of credit.
The facility fee was reduced to 10 basis points from 12-1/2 basis points on the previous facility. The tenor of the bullet loan has been increased to five from three years.
For an issuer of commercial paper with invesment grade ratings from both Standard & Poor's and Moody's Investors Service "the company is getting what we consider a very fair market price," said Chad Leat, managing director at Chase Securities, Inc.
This loan allows Great Lakes Chemical to increase the amount that it is authorized to issue on commercial paper by more than 30%.
The loan will serve as a backup for corporate paper. "The backup revolver market has improved since we've put this facility in place," said Great Lakes Chemical vice president and treasurer Richard Ferguson.
"It's a good time for us to be able to lock in a revolving credit facility for pricing and terms available in the market today."
The company is also in the midst of an active stock buyback program and normal acquisitions.
Mr. Leat considers the loan an extension to a core client in an arena in which the bank considers itself a market leader: the chemicals industry.
"We've led a number of financings over the years for Great Lakes Chemical," he said. A mixture of foreign and domestic banks comprise the seven other banks syndicating the loan, six of which were agents on the earlier loan.
The loan was not generally marketed, but was targeted to this specific group. The new syndicator for the bigger loan is Morgan Guaranty Trust Co. the main unit of J.P. Morgan & Co.
The syndicators for both loans are: First Chicago Corp., Mellon Bank Corp., NBD Bank, Sanwa Bank, BankAmerica Corp., and Credit Suisse.
Chase expects to close on the loan in the next two weeks.