Pike Electric Expands Revolving Credit Facility and Reduces Borrowing Costs PR, Monday December 12, 5:12 pm ET
MOUNT AIRY, N.C., Dec. 12 /PRNewswire-FirstCall/ -- Pike Electric Corporation (NYSE: PEC - News), one of the nation's largest providers of outsourced electric distribution and transmission services, today announced that it has increased and amended its existing credit facility.
The revolver portion of the Company's credit facility was increased from $70.0 million to $90.0 million, while the term loan portions remained at $286.1 million. After giving effect to the increase, the Company's borrowing availability under the revolving portion of the credit facility is now $50.9 million (after giving effect to $25.1 million of outstanding standby letters of credit). The increase in the revolving portion of the credit facility was provided by two new banks to the existing bank group -- Bank of America, N.A. (NYSE: BAC - News) and First Tennessee Bank, N.A. (NYSE: FHN - News), each committing $10 million.
The amendment includes an immediate 50 basis point reduction in borrowing costs on both the revolver and term portions of the credit facility, provides for an increased level of lease expense and allows the Company to make cash dividends to shareholders upon achieving certain defined leverage ratios.
"The amended credit facility expands our borrowing capacity, reduces our cost of capital and provides increased flexibility, which will facilitate the execution of our growth plans," said J. Eric Pike, Pike Electric's chairman and chief executive officer. "On an annualized basis, the reduced borrowing costs are expected to add $0.03 per diluted share to earnings."
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