Amphenol term loan B receives almost $300 million in commitments on day of launch

By Sara Rosenberg

New York, April 10 - Amphenol Corp.'s bank meeting for a new $750 million credit facility (Ba2/BB+) was very well attended on Thursday, according to a syndicate source, with the $500 million term loan B already "heading rapidly towards $300 million in commitments" by the end of the business day.

According to the source, the loan is a "quality deal" thanks to its good market position, history of deleveraging, generation of free cash flow and an "investment-grade type profile" since there is $1.8 billion in equity and total debt to capitalization is only about 30%.

"It went extremely well," the source continued, adding that the outlook for successful syndication of the pro rata tranches is also optimistic since the company "has some good relationships". The amount of commitments on the pro rata was not disclosed. However this is not surprising since banks tend to take longer to commit to a deal because they have to go through a credit committee.

The pro rata portion of the deal consists of a $125 million five-year revolver with an interest rate of Libor plus 200 basis points and a $125 million five-year term loan A with an interest rate of Libor plus 200 basis points. Upfront fees are 7/8 for a commitment of $35 million, 5/8 for a commitment of $25 million and 3/8 for a commitment of $15 million.

The $500 million term loan B is priced with an interest rate of Libor plus 250 basis points and has a quarter point upfront fee.

This facility was expected to hit the market a few weeks ago but was held off since the U.S. was on the verge of invading Iraq.

Proceeds from the loan will be used to refinance the existing credit facility and to repay $144 million of 9 7/8% senior subordinated notes. The pro rata portion of the existing loan has an interest rate of Libor plus 75 basis points and the existing term loan B has an interest rate of Libor plus 150 basis points, so this new deal will be a "nice premium to the guys who already have it," the source said.

Deutsche Bank and UBS Warburg are the lead banks on the deal.

Amphenol is a Wallingford, Conn. producer of electronic and fiber optic connectors, cable and interconnect systems.

Meanwhile, talk around the market is that the book may have sold out already for Allied Waste Industries Inc.'s new $1.5 billion seven-year term loan B (Ba3/BB/BB) priced at Libor plus 325 basis points, according to market sources. The deal was anticipated to go exceptionally well partly due to the large existing lender group, attractive pricing and anticipation that the deal will trade well once it hits the secondary market.

Besides the term loan B, the Scottsdale, Ariz. solid waste management company's facility also contains a $1.5 billion five-year revolver with an interest rate of Libor plus 300 basis points that was already fully committed.

JPMorgan and Citibank are the lead banks on the deal with Credit Suisse First Boston, Deutsche and UBS Warburg participating as well.

Proceeds will be used to refinance existing debt.

DirecTV's term loan B is performing well in the secondary with quotes above par, according to a trader.

But asked whether the loan has moved up following the Wednesday evening announcement that News Corp. will acquire a stake in Hughes Electronics, the trader responded: "It's where it's been." He added that there is not much room for the par-plus paper to move up since the tranche has no call protection. LoanX has the term loan B quoted at par bid, 100.354 offer.

News Corp., General Motors and Hughes Electronics reached a definitive agreement in which News Corp. would acquire GM's 19.9% stake in Hughes and a further 14.1% of Hughes from public shareholders and GM's pension and other benefit plans. At closing, News Corp.'s 34% ownership interest will be transferred to Fox Entertainment Group, Inc., an 80.6%-owned News Corp. subsidiary, in exchange for a $4.5 billion promissory note and approximately 74.2 million shares in Fox at $27.99 per share, increasing News Corp.'s equity interest in Fox Entertainment to approximately 82%.

The businesses contained in Hughes include DirecTV, an 81% equity holding in satellite operator PanAmSat, and Hughes Network Systems.

DirecTV's loan, which closed about a month ago, was very well received by the bank loan market partly due to rumors that an investment-grade company would be buying the issuer. In fact, the term loan B was upsized to $1.05 billion from $800 million during the syndication process because of the positive reception that it received in the institutional market. Deutsche Bank, Bank of America, Credit Suisse First Boston, Salomon Smith Barney and Goldman Sachs were the lead banks on the deal.

DirecTV is an El Segundo, Calif. digital satellite television service provider. Hughes is a provider of digital television entertainment, satellite-based private business networks, and global video data broadcasting.

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