Goldman Sachs' $250 million "B" piece for Sanmina-SCI Corp. has closed oversubscribed with an extra $50 million coming in. "A number of institutional investors are throwing in 10% or more," said a banker familiar with the deal. He declined to name any investors on the facility. The loan is priced at LIBOR plus 4-41/ 4%, with a 1% original issue discount, the banker stated, adding that pricing could go towards the tight end now that the line is oversubscribed. Despite filling, final commitments on the credit are due this Wednesday. Allocations will probably be cut back, as capacity is unlikely to be increased, he said. A Goldman official declined to comment.
An investor looking at the deal pointed to the electronics contract manufacturer's significant cash write-off at the end of the year ending last September. He said, however, that the strength of the security package would keep investors interested. "The collateral package is very strong. There is a borrowing base of working capital that more than covers the loan," the banker stated.
The Sanmina credit is part of a refinancing plan that also includes a $450 million, seven-year, senior secured notes offering. 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. "They are doing this loan at the trough of the cycle for the tech sector," the banker noted, explaining that investors could be anticipating an upturn. Calls to officials at Sanmina were not returned by press time.