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Life Health > Life Insurance > Term Insurance

BISYS Replaces Credit Facility

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A business support services company has secured a new source of financing.

The company, BISYS Group Inc., New York, has arranged for a credit facility that will supply up to $450 million in cash from a unit of SunTrust Banks Inc., Atlanta.

BISYS has been having trouble filing financial reports with the U.S. Securities and Exchange Commission because of systems and accounting problems. The filing troubles disrupted the company’s use of its old credit facility, because contract terms for the old credit facility required BISYS to file copies of its financial reports with its lenders, according to BISYS.

The new credit facility, which has a term of 1 year, will provide up to $100 million in revolving credit and a term loan for up to $300 million.

BISYS says the credit facility that was terminated provided only $150 million in revolving credit, and it notes that the reporting obligations associated with the new credit facility are simpler.

BISYS had no borrowings outstanding on the old credit facility at the time the old credit facility was canceled, the company says.

BISYS says $300 million of its convertible notes are due March 15.

BISYS, which sells support services to life insurers and other financial services companies, is in the process of selling an information services unit. The company hopes to use the proceeds from the unit sale to retire the convertible notes, which pay an interest rate of 4%.

If necessary, BISYS could use the $300 million term loan to pay off the notes, but the company says it wants to avoid doing so because the cost of paying off the term loan might be higher than the cost of paying off the notes.


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