Sanmina-SCI Corp. sealed a $275 million "B" loan that was oversubscribed by more than three times as part of its $1.025 billion initiative to refinance and pay down debt. The loan closed in conjunction with a $750 million 103/ 8%, seven-year, senior secured note offering. Both the term loan and the notes were upped from their initially proposed amounts. The loan increased by $25 million, while the notes were boosted by $300 million. Sanmina was pleased with the timing of the transaction and the final terms, said Rick Ackel, executive v.p. of finance and cfo.
Ackel said the credit would be used to refinance and repay existing debt, as well as for working capital and further business expansion. Included in the debt to be refinanced is about $400 million of tapped funds on Sanmina's previous $750 million revolver. Another balance of approximately $200 million on a receivables securitization facility will be repaid, he also noted.
The San Jose, Calif.-based electronics contract manufacturer liked the versatility of the "B" loan route combined with the notes offering, Ackel said. "This transaction afforded us the most flexibility and made the most sense from a strategic business standpoint," he stated. Goldman Sachs was sole lead on the credit. "We are pleased with the advice and selection of Goldman . . . not only with the execution, but with the overall timing from the initial launch through the conclusion," he noted.
The "B" piece priced at LIBOR plus 4%, after initial talks in the LIBOR plus 4-41/ 4% range. The credit attracted over 50 investors. Allocations were still cut back despite the $25 million upsurge in capacity because the loan's borrowing base limited how much the credit could be increased, according to bankers (LMW, 12/23). Sanmina's total present bank and bond debt is approximately $2.478 billion, Ackel said.