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On Monday, Genesee & Wyoming Inc. announced that it had closed on a five-year, $182 million unsecured senior credit facility and completed a seven-year, $75 million private placement of unsecured 4.85 percent fixed-rate senior notes.

An operator of short line and regional freight railroads in the United States, Canada, Mexico, Australia and Bolivia, GWI plans to use proceeds from the $257 million financing to repay about $110 million of debt outstanding at its U.S. and Canadian subsidiaries. The remaining unused borrowing capacity will be available for general corporate purposes, including acquisitions.

The new credit facility comprises a US$150 million revolving loan and a C$38.5 million (US$32 million) Canadian term loan, both of which are due in 2009. Initial borrowings were priced at LIBOR plus 1.0 percent, compared with LIBOR plus 2.0 percent under GWI's former credit facility. Bank of America N.A. served as sole lead arranger and administrative agent; JP Morgan Chase Bank acted as syndication agent. Other participating lenders were LaSalle Bank, Key Bank, National City Bank, Citizens Bank, Sovereign Bank, BB&T and Comerica.

The US$75 million fixed rate senior notes were priced at a spread of 1.15 percent over the seven-year U.S. Treasury and are due in 2011. Participating investors were PPM America, Metropolitan Life Insurance, TIAA-CREF and Mutual of Omaha. Banc of America Securities L.L.C. acted as private placement agent.

"This debt refinancing is an important milestone in GWI's growth as we have now reached a size where we can materially reduce the long-term cost of our debt capital," said GWI Chief Financial Officer John Hellmann in a prepared statement. "… Meanwhile, we are maintaining significant acquisition capacity under our revolver, which provides flexibility to execute our growth strategy."