Amphenol Corp.'s Lenders Win Sweetened Recap Terms

Amphenol Corp. has sweetened certain terms of its planned recapitalization, apparently to appease balking lenders and potential equity investors.

Last week, the Wallingford, Conn., maker of electronic connectors agreed to a substantial increase in the pricing of its $250 million bank credit to make it more appealing.

The borrowing rate was increased to 150 from 112.5 basis points over the London interbank offered rate, a 33% boost.

Bankers Trust Co., which underwrote the credit in August, had trouble syndicating the loan as originally priced.

Meanwhile, a planned initial public offering appears to be stumbling and may have to be repriced. "It's not going gangbusters," one source said.

An announcement concerning the stock offering could come as early as today.

At the same time, another aspect of Amphenol's recapitalization -- the private placement of $100 million of senior notes -- was apparently wrapped up Friday, when commitments were obtained for the full amount.

Amphenol's recapitalization amounts to a reverse leveraged buyout of the company, which was taken private in 1987.

Proceeds from the stock offering and private placement will be used in part to retire high-cost debt stemming from the buyout.

As sole agent of the new bank credit, Bankers Trust encountered a lackluster response from Amphenol's other relationship banks when it sought to syndicate the loan initially.

5 Others Come on Board

Only five other banks signed up, committing a total of just $115 million, leaving Bankers Trust with more than half of its original underwriting exposure.

The five were: ABN Bank, Dresdner Bank, Bank of Montreal, Nippon, and Westpac.

A number of Amphenol's other banks remained on the fence until the credit was repriced. But by Friday afternoon, the syndicate was said to have been oversubscribed.

Other Terms Tightened

In addition to improved pricing, Amphenol agreed to more stringent terms in the credit agreement concerning such matters as the use of free cash flow and dividend payments.

The size of the credit was also increased by $10 million, partly because Amphenol and its investment bankers now expect to raise only about $160 million -- the minimum amount required by the banks' credit agreement.

In its filing with the Securities and Exchange Commission in August, Amphenol said it planned to sell 12 million shares between $13.50 and $15.50. Taking the midpoint of that range, Amphenol would have raised $174 million.

However, the offering was apparently too richly priced for investors. As a result, sources said, it is likely that Amphenol will cut the price but sell more shares.

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