NFP Closes on Credit Facility

By Warren S. Hersch

July 09, 2010 at 08:00 PM

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National Financial Partners Corp. says it has taken several steps to reduce exposure to refinancing risk.

NFP, New York (NYSE:NFP), has worked with a unit of Bank of America Corp., Charlotte, N.C., to set up a $100 million, 4-year revolving credit facility due 2014; take out a $125 million, 4-year term loan; and issue $125 million in 4% convertible senior notes due 2017.

The financial services distributor, which was growing rapidly through acquisitions before the recent recession hit, has used the financing to buy back and retire about $230 million in 0.75% convertible senior notes due 2012 through a tender offer that was completed Thursday. NFP also paid all amounts it owed to the lenders who provided an older credit facility that was due August 2011.

NFP says it has not yet drawn any amounts from the revolving credit facility.

The contract for the new term loan requires NFP to make quarterly principal payments equal to 2.5% of the principal value of the loans.

The transactions have extended maturities for NFP debt due in 2011 to 2014 and for debt due in 2012 to 2017, the company says.

NFP reported $7 million in net income on $225 million in revenue in the first quarter. The company spent $4.6 million on interest expenses during the quarter and ended the quarter with $51 million in cash and cash requivalents.

"Going forward, our enhanced financial flexibility and effective capital structure, along with our recent streamlining and reorganization, allow us to focus on long-term growth opportunities," NFP Chairman Jessica Bibliowicz says in a statement about the transactions.

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