Hello and welcome to this Credit Case-in-Point. The company we are going to look at is called Smithy Glass and Ceramics, and it's a fictitious company. It's a 200-year-old manufacturer and seller of glass and ceramics based in the U.S. It's got operations in Europe, Mexico, and China. It owns manufacturing facilities in many countries and it sources manufactured products to complement its own lines. It's the largest glass tableware manufacturing, distribution, and service network in the Western Hemisphere and it's got customers in a lot of countries. It sells under its own branded line, as well as other brand names, primarily in the food service, retail, e-commerce, and business-to-business channels.

Here we're being given some operating data for Smithy. We can see here that the largest market by far is the Americas. We can also see that probably the sales growth has probably stalled a little bit. Margins are swinging around a little bit, but we have a lot more operational data in the three statement model that is attached to this course. So you should have a look there. We will also be working in that model later. What we're considering here is a refinancing, so let's look at some historical events when it comes to financing for Smithy. Eight years ago, Smithy issued $400 million worth of senior secured notes at an interest rate of 10%. Very high interest rate, but remember, global interest rates were also higher a while back. Five years ago, they secured a new revolving credit facility for $110 million.

And a year later, that revolver size was amended to 100 million.

Two years ago, they refinanced the old notes with another $450 million of senior notes, again at a relatively high coupon rate of 6.875%.

A year ago, they redeemed 45 million of those notes, and finally, today, they're seeking to refinance the remaining notes with cheaper capital, and this is going to be the focus of our little project together.