Goldman Sachs effectively shut down syndication of Sanmina-SCI Corp.'s $275 million "B" piece last Wednesday after the credit was three times oversubscribed to a group of more than 50 investors. The credit was upsized from $250 million and pricing landed at LIBOR plus 4%, said a banker familiar with the deal. Pricing was initially targeted at LIBOR plus 4-4 1Ž4 %. The banker explained that the loan's borrowing base limited the credit's expansion, leading to the increase of only 10%. Investors were keen on the San Jose, Calif.-based company's credit security package, but allocations were still cut back because of the lid on capacity, he noted. Some institutional investors were initially throwing in bids for 10% or more of the credit (LMW, 12/16). A Goldman official declined to comment.
The Sanmina "B" loan is part of a refinancing plan that also includes a $750 million, seven-year, senior secured notes offering. The bonds were priced last Wednesday at 103Ž 8% after being upsized from $450 million, the banker said. The notes and credit are secured by the same collateral package. The electronics contract manufacturer 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. 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. The deals are slated to close today. Sanmina officials did not return calls by press time.