Aftermarket Technology Corp. is set to close on a new credit facility in tandem with an equity offering designed to increase liquidity in trading of the shares and rework its balance sheet. "ATC is in the process of regrouping the capital structure through a share offering and so the credit facility is being put in place at the same time," noted Mary Ryan, director of investor relations. "It's being done in one fell swoop," she said. ATC is offering 2.4 million shares, she said, a response to investor requests for increased liquidity in the company's shares. "The stock is very thinly traded." Proceeds from the equity offering will partially replace existing debt, Ryan added.
The new $170 million in term loans led by J.P. Morgan and Credit Suisse First Boston will also be used to repay the existing credit facility and redeem or repurchase a portion of the company's 12% subordinated notes. Additionally, there is a $50 million, five-year revolver. The $95 million "A" loan maturing in 2007 carries a LIBOR plus 2 1/4 % spread and a $75 million "B" loan maturing in 2008, is priced at LIBOR plus 3%. The credit facility is rated BB-/Ba3. Ryan noted J.P. Morgan, the administrative agent, has a long-term relationship with ATC, but she could not comment on why CSFB, the syndication agent won a lead spot.
Morgan Stanley leads the offering, with Merrill Lynch and Wachovia Securities as co-leads. The credit facility will officially close when the roadshow for the equity offering is complete early next month, though the date for commitments ended two weeks ago on the loan, Ryan explained. ATC manufactures transmissions engines and automotive electronics, and derives three-quarters of revenue from selling remanufactured replacement parts to auto dealers.