UBS Warburg and Deutsche Bank hit the market last Thursday with a $750 million refinancing credit for cable and communications products provider Amphenol. The deal comprises a seven-year, $500 million "B" loan priced at LIBOR plus 21/2% and a five-year, $125 million revolver and $125 million "A" piece at a spread of 2% over LIBOR. A banker familiar with the deal noted that the new term loan sports a better premium than the company's existing $375 million "B" piece, which is priced at LIBOR plus 11/2%. The existing credit also includes a $310 million "A" loan and $150 million revolver priced at LIBOR plus 3/4%. Deutsche Bank leads this credit with J.P. Morgan and Bank of New York also acting as top tier lenders. A UBS official declined to comment. A Deutsche Bank banker did not return calls.
The BB+/Ba2 rated facility is secured by a first-priority perfected pledge of the capital stock of Amphenol's domestic subsidiaries and 65% of the capital stock of its foreign subsidiaries. There is also a springing lien triggered if the ratings fall to BB-/Ba3, which would kick in essentially all of the assets of the company. Standard & Poor's noted in its Amphenol ratings release that "even though the loans are secured, recovery prospects in default are still mediocre, as nearly half of the company's assets are goodwill." Calls to company officials were not returned.