Some investors may attempt to prevent a price cut on DRS Technologies' $234 million "B" loan that would cut pricing down to LIBOR plus 13/4%, but the move may be futile. A buysider familiar with the deal said there is going to be a groundswell to attempt to block the repricing. But Richard Schneider, DRS' cfo, said he does not believe investors are that upset. "I know most people that I've talked to understand why the amendment is being proposed," Schneider said. "While they're disappointed, they are supportive of DRS." Schenider said the company is pursing the amendment "to adjust our term loan rates to the current market."
Wachovia Securities is leading the amendment that would cut the price down from LIBOR plus 21/2%. The loan is priced on a grid tied to leverage. The bank facility also comprises a $175 million untapped revolver that will not be affected by the amendment. DRS focuses on defense technology and provides services to defense, government intelligence and commercial customers.