Federal-Mogul Corp., the auto-parts supplier controlled by Carl Icahn, increased the size and extended the maturity on a revolving line of credit as it faces $1.6 billion of debt maturities next year.
The revolver was increased to $550 million from $540 million and will mature in December 2018 instead of this month, the company said in a regulatory filing today. Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. arranged the transaction.
Federal-Mogul is seeking to manage maturities on debt it obtained after exiting bankruptcy in 2007. The company withdrew plans six months ago for a $3.05 billion refinancing that would have doubled borrowing costs. High River Limited Partnership, the company’s largest stockholder, will provide a $1.6 billion loan financing if the Southfield, Michigan-based company is unable to refinance the debt, which comes due next December, by Sept. 27, according to the filing.
Steven Gaut, a spokesman at Federal-Mogul, didn’t immediately return a phone call seeking comment.
The term loan was quoted at 98.94 cents this afternoon, up from 98.87 cents Dec. 6, according to prices compiled by Bloomberg.
In June, the company had been seeking a $1.75 billion term loan, a $550 million revolving credit line and $750 million of bonds to refinance its debt, according to a June 10 regulatory filing.
The company had offered to pay lenders the higher of 4.75 percent or 3.75 percentage points more than the London interbank offered rate with a 1 percent minimum on the lending benchmark on a new, seven-year loan, compared with 1.94 percent it pays now.
“Due to volatile market conditions, the company intends to defer the refinancing activities,” Federal-Mogul said in a statement at the time.
In a revolving line of credit, money may be borrowed again once it’s repaid; in a term loan it can’t.