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Solectron looking at five- to seven-year maturity for $500 million high-yield debt
By Paul A. Harris
St. Louis, Mo., Jan. 3 - Solectron Corp. is currently considering a maturity in the five- to seven-year range for its $500 million high-yield bond offering, according to Thomas Alsborg, the company's director of investor relations.
Redemption and any equity clawback features have yet to be determined, he added.
"All these terms are still subject to negotiation," Alsborg told Prospect News, addding: "We expect to do it sometime early in the year, probably this fiscal quarter, which ends in February."
He also said that it remained to be determined whether the new Solectron paper would be a public offering or a Rule 144A offering. However, an informed source told Prospect News that the issuance would likely be a Rule 144A offering.
Last month market sources rumored that Goldman Sachs & Co. would run the deal. An informed source told Prospect News on Thursday that although Goldman Sachs would participate, the bookrunner or bookrunners had yet to be determined. An official announcement is expected in the next week to 10 days, the source added.
On Dec. 18, Solectron announced that it received a commitment for a $500 million revolving credit facility from Goldman Sachs Credit Partners LP.
The new Solectron deal is rated Ba1/BB+, both with negative outlooks, the source said.
Solectron completed a $1 billion offering of mandatory convertible securities on Dec. 20.
Alsborg said that the company would use proceeds from the pending high yield bonds, in conjunction with the convertibles "for managing debt in the future, and restructuring our balance sheet."
Milpitas, Calif.-based Solectron provides supply chain management for original equipment manufacturers (OEMs).
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