Credit Suisse First Boston and J.P. Morgan are scheduled to launch today syndication of a $220 million refinancing for Aftermarket Technology Corp., a re-manufacturer of transmissions, engines, and automotive electronics for the automotive market. The senior unsecured BB-/Ba3 credit consists of a $50 million five-year revolver, with a spread of LIBOR plus 21/ 4% and a 1/2% commitment fee. There is a $95 million five-year "A" term loan, with the same spread and a $75 million "B" term loan with a six-year tenor. The spread on the institutional tranche is LIBOR plus 3%. Calls to Barry Kohn, cfo of ATC were referred to Mary Ryan, director of investor relations. Ryan explained ATC is undertaking a share offering process and it is a good time to regroup the capital structure. ATC is retiring the 12% notes and Barry [Kohn] wants to reduce the debt level.
J.P. Morgan is lead and administration agent and CSFB is co-lead and syndication agent. Aurora Equity Partners owns 67% of the firm. Ryan said CSFB is new to the company, but she did not know the reasons for the addition. "J.P. Morgan has been the banker forever," she added. Last month, Standard & Poor's raised the ratings on ATC, based off the improved financial profile. ATC derives about three-quarters of its revenues from selling re-manufactured replacement parts to automotive dealers and about one quarter from logistics services. The latter business is the company's fastest growing area and over time, is likely to account for an increasing proportion of total revenues. Debt to EBITDA is under 3 times, compared to 4.3 times in 1999. "ATC was delighted with the recent upgrade, but this is unrelated to the refinancing," Ryan commented.