Deutsche Bank and Bank of America last Wednesday launched syndication of a refinancing deal for Fairchild Semiconductor International. The credit consists of a $100 million revolver and a $400 million term loan. Pricing is LIBOR plus 1 1/2% on both tranches.
Carla Dupuis, assistant treasurer, said the company decided to do the refinancing because it has a $180 million revolver coming due next June. It also has a $450 million term loan. Both tranches are priced at LIBOR plus 1 3/4%. She said the bank markets have also been reasonably favorable as far as pricing goes. Deutsche Bank and Bank of America led that deal and Dupuis said both banks have been part of the company's bank group for a number of years.
One portfolio manager anticipates that it will largely be banks playing in the credit because of pricing. "At LIBOR plus 150, the term loan is $400 million, not a huge term loan; it's bank-style execution," he said. "If they stick to 150 that would probably indicate a lot of banks are willing to take it out; [it will] probably leave the institutional market."
Dupuis said the deal is being pitched to the existing bank group, which includes both investors and banks. She said existing investors and new parities, whether they are institutional investors or banks, are being shown the deal. Based in South Portland, Maine, Fairchild makes semiconductors for automotive, industrial and telecommunication companies.