Buckeye Establishes USD 200 Million Senior Credit Facility
Memphis, Tennessee, USA, 25 July 2007 --(BUSINESS WIRE)-- Buckeye Technologies Inc. (NYSE:BKI) announced today that it has established a new USD 200 million senior secured revolving credit facility.
The maturity date on the new revolver is July 2012. The facility includes an increase option for an additional USD 50 million. This facility amends and restates the company's existing credit facility, which consisted at the closing date of an undrawn USD 70 million revolver and a USD 30 million balance on an original USD 150 million term loan.
The company plans to use the proceeds from this facility to refinance its existing senior credit facilities, to refinance up to USD 20 million of its 8.0% senior subordinated notes having a maturity date of October 2010, to refinance the remaining USD 60 million of its 9.25% senior subordinated notes in September 2007 (one year ahead of maturity), and for general corporate purposes. The company expects to reduce interest expense by about USD 2 million per year on a going basis as a result of this refinancing.
Buckeye chairman John B. Crowe commented, "Over the past 5 years, we have made tremendous progress in reducing our debt. This new facility allows us to take advantage of our improved credit position and the favorable market conditions to reduce our interest costs and achieve more operating flexibility than we had under our existing credit facility. In addition, this new facility gives us the ability to continue our debt reduction while maintaining sufficient operating liquidity to support our business. We appreciate the leadership provided by Bank of America as lead arranger for this facility."
Buckeye, a leading manufacturer and marketer of specialty fibers and nonwoven materials, is headquartered in Memphis, Tennessee, USA. The company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.