Bankers Trust Is Marketing $250 Million Amphenol Credit

Reverse leveraged buyouts continue to provide a steady stream of new lending business for banks.

In one of the latest deals, Bankers Trust New York Corp. will hold a syndicate meeting Thursday for lenders interested in participating in a new $250 million credit for Amphenol Corp., a 1987 leveraged buyout about to go public through an initial stock offering.

Bankers Trust, the sole underwriter of the new bank loan, has been talking to potential coagents and lead managers for several weeks, and has signed up at least one bank so far.

A Bankers Trust official declined to identify the bank, except to say it was a foreign lender.

Recapitalizations

While there have been few new buyouts for banks to finance, a number of seasoned LBOs have seized the opportunity to raise capital in the public equities market in recent months. In many cases, the recapitalizations have also involved new bank financing.

"It's been one of the few bright spots in terms of deal flow," one banker commented.

In two recent cases, for example, York International and Interstate Bakeries raised new bank financing in conjunction with their respective stock offerings.

Standard & Poor's Corp. analyst Robert Natale, who specializes in IPOs, said investor demand for initial stock offerings is still healthy, thanks to the fact that those companies that went public in the spring have performed fairly well in the aftermarket.

There are "literally hundreds" more LBOs that could go public again, he added.

Stock Offering's Chances

In the case of Amphenol, a major supplier of electrical and electronic connectors, Mr. Natale isn't recommending purchase of the stock because he doesn't like the connectors industry. Still, he thinks there will be enough investor interest for the IPO to succeed.

Proceeds from the stock offering and a separate offering of senior subordinated debt will be used in part to retire existing Amphenol bank debt and public junk bonds stemming from the 1987 buyout of the company from Allied Signal for $440 million.

Parent Company's Stake

LPL Technology, Amphenol's parent company, will retain a 42% interest in the company, following the offering.

Amphenol filed with the Securities & Exchange Commission in August to offer 12 million common shares at an expected price of $13.50 to $15.50 each, through Merrill Lynch & Co.

The new bank credit, consisting of a $180 million term loan and $70 million revolver, is priced at 112.5 basis points over the London interbank offered rate.

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