Watson, Towers Perrin enter $500M credit facility

NEW YORK — Management consulting firms Watson Wyatt Worldwide Inc. and Towers Perrin, which plan to combine in 2010, said Friday they will enter into a $500 million revolving credit facility.

The companies committed to the facility to pave the way for their combination. The companies signed commitment letters with Bank of America, Banc of America Securities, PNC Bank, and PNC Capital Markets. The borrower will be Towers Watson & Co., which will be the name of the combined company.

In a filing with the Securities and Exchange Commission, the companies said they received the commitments on Monday. Bank of America and PNC committed up to $75 million each under the credit facility, which will have a term of three years.

Funds from the credit facility may be used to refinance and retire existing debts from the two companies, to cover costs of the merger, to pay cash considerations to Towers Perrin shareholders or repay senior unsecured notes due in the first year after the combination, to finance acquisitions, or for other general corporate purposes.

The companies agreed to merge in a $3.5 billion all-stock deal in June.