Amkor Technology recently completed two financings, one in the U.S. and one in Taiwan, in hopes of improving its liquidity. The first deal was done by the company's subsidiary, Amkor Technology Taiwan, which closed on a syndicated NT$1.8 billion loan, about $54 million. The second deal, a $100 million revolver in the U.S., was inked by Amkor.
Joanne Solomon, v.p. and treasurer, explained that Taiwan is a very attractive capital raising market for the company. "Amkor is very much a global company with subsidiaries throughout Asia," she said. By doing the loan in Taiwanese denominations, the company addressed problems such as foreign exchange exposure and was able to take advantage of attractive interest rates. Chinatrust Commercial Bank and Ta Chong Commercial Bank co-lead the deal. Solomon explained that the choice of banks was based on their strength in syndicated lending in Taiwan and a prior relationship one of the company's subsidiaries had with them.
In the U.S., Bank of America and Wachovia Securities co-led the revolver for Amkor, which will be used to help reduce leverage. It has debt coming due in 2006 and 2007 and Solomon explained that if cash flow from operations is not significant enough to pay off the loans at their maturities, this revolver would be used to do so. The company had previously worked with B of A in 1998 and Solomon described the choice of that bank as a "refreshed relationship." It had never worked with Wachovia, but an executive at the company had a previous relationship with the bank. "The revolver is an asset-based loan revolver, so based on availability of receivables," she explained. "We did our research, we came up with the two banks that are leaders in the product and B of A is number one."
Amkor plans to address its capital structure in the future, but has not settled on one strategy for 2006. "Being a highly leveraged company, addressing the capital structure is something we always evaluate," Solomon said. "We will continue to work with all our bankers and listen to all different options [in order to deleverage]."