Sanmina-SCI enters amended five-year $300 million loan agreement

By Marisa Wong

Madison, Wis., March 19 - Sanmina-SCI Corp. entered into an amended and restated loan agreement on March 16, according to an 8-K filed Monday with the Securities and Exchange Commission.

The new agreement, which amends and restates the company's existing loan dated Nov. 19, 2008, provides for a $300 million secured asset-based revolving credit facility with a $100 million letter-of-credit sublimit.

The facility may be increased by up to $200 million.

The loan agreement expires on the earlier of (i) the date that is 90 days prior to the maturity date of the company's senior floating-rate notes due 2014 or the company's 8 1/8% senior subordinated notes due 2016, if the notes haven't been repaid or redeemed prior to maturity, and (ii) March 16, 2017.

Interest is equal to Libor plus 175 basis points to 225 bps, depending on availability. A commitment fee will accrue on any unused portion of the loan at a rate based on usage.

The borrowing base is subject to certain customary reserves and eligibility criteria. If at any time the total principal amount of the loans outstanding plus the face amount of undrawn letters of credit under the loan agreement exceeds the borrowing base then in effect, the company must make a prepayment or post cash collateral in a sufficient amount to eliminate the excess.

The agreement also requires the company in certain circumstances to prepay loans with cash proceeds from certain types of asset sales. The company may prepay loans in whole or in part at any time without penalty. Amounts prepaid may be re-borrowed.

The agreement requires the company to comply with a fixed-charge coverage ratio during the period beginning on the date that availability is less $50 million and continuing until the date on which availability has been greater than $50 million for the preceding 90 consecutive days. If commitments increase under the loan, the $50 million threshold will be changed to 15% of the greater of the borrowing base and the total amount of the commitments.

As of the closing date, there is $23.2 million of letters of credit outstanding under the loan agreement but no loans outstanding.

Sanmina-SCI Systems (Canada) Inc. and SCI Brockville Corp. are the designated Canadian guarantors for the facility.

Bank of America, NA is the agent.

Sanmina-SCI is a San Jose, Calif.-based provider of integrated electronics manufacturing services.

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