Titan changes the face of its financing
Fresh from securing a new $100 million revolving credit agreement with agents LaSalle Bank National Association and General Electric Capital Corp., Titan International Inc. announced it was redeeming all of its outstanding 8.75% senior subordinated notes, which were due in 2007.
The redemption date for the notes, valued at $136.7 million, will be Aug. 26, 2004, at a redemption price of 101.458% per note inclusive of the redemption premium.
In addition, the note holders will receive their accrued and unpaid interest due on the notes on the redemption date.
"Although there were times the rating agencies questioned Titan´s financial stability, we lived up to our commitment and will repay our bond holders in full at the redemption price as per the note agreement," said Titan CEO and President Morry Taylor.
The $100 million revolving credit facility used to redeem the notes has a 36-month term. It replaces the company´s former $20 million revolving credit agreement and term loan, which were terminated on July 23.
The new credit facility will be secured by a first priority security interest in certain assets of Titan´s domestic subsidiaries. The borrowings under the facility will bear interest at a floating rate of either prime rate plus 1.5% or at LIBOR plus 3%.
"We are extremely pleased with the financing Titan has secured as this provides the flexibility to take advantage of business opportunities as they arise," said Taylor.
Prior to securing the credit facility, Titan completed the sale of $100 million of 5.25% convertible senior unsecured notes, which are due in 2009. The sale began July 14, 2004 and ended July 26.
The Rule 144A offering included an option to purchase an additional $15 million of the notes. The initial purchasers excersized that option.
Titan officials said the net proceeds will be used to pay off some outstanding principal.
Titan´s stock on the New York Stock Exchange closed at $10 a share on Tuesday. That compares to a 52-week high and low of $12.30 and $1.25, respectively.