Goldman Sachs is in the market with a $250 million "B" loan for San Jose, Calif.-based Sanmina-SCI Corp., an electronics contract manufacturer, after deciding to skip the gimpy pro rata market. The loan launched last Thursday with a bank meeting in New York, with pricing most likely to be between LIBOR plus 4-41/ 4%, said a banker familiar with the credit.
One potential factor that makes the deal tough is a perception the company is a "giant Viasystems [Group ]," said one investor. Viasystems is also an independent provider of electronics manufacturing services that filed for Chapter 11 last October. "People lost a lot of money on them," he explained, adding that pieces of the paper have recently traded at 57. A banker disagreed strongly though, pointing to Viasystems as purely a high volume printed circuit board shop. Sanmina is more broadly diversified and vertically integrated, where printed circuit boards, for instance, only represent 4% of its business, he said. Sanmina has many multiple facades to its business, unlike Viasystems, he added.
The Sanmina credit is part of a refinancing plan that also includes a $450 million, seven-year, senior secured notes offering. Sanmina decided to execute the refinancing now in order to take advantage of the strong high-yield market and to clean up its balance sheet for the new year, the banker commented. The high-yield road show will begin tomorrow, the banker stated. Proceeds from the plan will be used to repay a receivables securitization facility, debt under an existing credit facility and to fund general corporate purposes. Calls to Rick Ackel, Sanmina cfo, were not returned.