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Published on 6/1/2005 in the Prospect News Bank Loan Daily.

Laidlaw launches $600 million credit facility

By Sara Rosenberg

New York, June 1 - Laidlaw International Inc. held a bank meeting Wednesday to launch its proposed $600 million credit facility (BBB-), according to a market source.

Citigroup Global Markets Inc. and UBS Securities LLC are joint lead arrangers on the deal.

The facility consists of a $300 million term loan due 2010 and a $300 million revolving credit facility, with both tranches talked at Libor plus 125 basis points, according to a second market source.

Laidlaw is receiving the new credit facility in connection with the launch of a comprehensive plan to recapitalize its balance sheet.

Proceeds from the credit facility and cash on hand will be used to retire the existing public debt of about $560 million issued by Laidlaw and Greyhound Lines Inc., a wholly owned subsidiary.

The company plans a cash tender offer for its $404 million of 10.75% senior notes due 2011 and looks to redeem Greyhound Lines' $150 million 11.5% notes due 2007 and Greyhound Lines' $5 million 8.5% convertible debentures due 2007.

The revolver, which will replace the existing $200 million revolver, will provide seasonal and interim borrowings for the company and its subsidiaries.

"The sale of the health care companies earlier in the year enabled us to focus on Laidlaw's core transportation businesses, while also substantially strengthening the balance sheet," said Kevin Benson, president and chief executive officer of Laidlaw, in a company news release.

"The transactions that we are outlining today take advantage of that strength to further improve our financial position and our profitability over the next several years. Completion of our financing plans will significantly reduce the cost of our debt and put to work the cash we generated with the health care sale."

Laidlaw is a Naperville, Ill.-based holding company for North America's largest provider of school and inter-city transport and public transit services.


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