Bank Consortium Commits $600 Million Term Loan to Sanmina-SCI Corp.

A consortium of banks led by Bank of America, Citigroup, and Deutshe Bank has agreed to provide a $600 million term loan to Sanmina-SCI Corp. The loan will be used to refinance $525 million of the company's 3% convertible subordinated notes due 2007, as well as for working capital and general corporate purposes. The term loan is set to mature on January 31, 2008, according to a Securities and Exchange Commission filing.

Key Takeaways:

The $600 million term loan will be used to refinance $525 million of Sanmina-SCI Corp.'s 3% convertible subordinated notes due 2007.
The loan is led by a consortium of banks including Bank of America, Citigroup, and Deutshe Bank.
The term loan will also be used for working capital and general corporate purposes.
Moody's Investors Service and S&P assigned Ba2 and BB- ratings to the proposed facility, with Moody's placing the debt ratings under review for possible downgrade.
The downgrade review is due to Sanmina's stock option administration practices and its delayed financial statement filing.
Sanmina has obtained consent waivers from all debt holders except for the holders of its 2007 subordinated convertible notes.
Misdated stock option grants will cause the company to restate finances for the past nine fiscal years.

Statistics:

$600 million: The amount of the term loan provided by the bank consortium.
$525 million: The amount of Sanmina-SCI Corp.'s 3% convertible subordinated notes due 2007 to be refinanced.
January 31, 2008: The maturity date of the term loan.
2006: The year in which Sanmina announced its investigation into stock option administration practices.
9 fiscal years: The period for which Sanmina will restate its finances due to misdated stock option grants.
10-Q: The quarterly financial statement filing that Sanmina was unable to submit by the required deadline, causing a violation of its borrowing program covenant.

Sources:

Bankloanreport.com
Sourcmedia.com