TPG, Affinity-backed UTAC seeks to refinance debt – report

According to Reuters, UTAC faces an October 2013 refinancing deadline on a $150 million revolving credit facility. Bank of America Merrill Lynch, Credit Suisse, J.P. Morgan and UBS have agreed to replace the facility and they are also expected to receive the mandate for a US high-yield bond issue.

TPG and Affinity privatized UTAC through a $1.25 billion leveraged buyout in 2007, which include around $725 million in debt. It was one of the first cov-lite deals seen in Asia, whereby the debt carries fewer covenants, limiting creditors' ability to act if they fear the company will be unable to keep to its repayment schedule.

The private equity firms attempted to re-list UTAC in 2010 and 2011 but were forced to abandon the process due to deteriorating public markets.

Earlier this year, KKR-owned MMI International successfully issued its $300 million high-yield bond, principally attracting interest from US investors due to their familiarity with the sector and the company's customer base. It was the first-time a high-yield bond had been used to take out a buyout loan in Asia.

In 2011, Unitas Capital became the first firm to use a high-yield bond in a buyout transaction in the region, securing $375 million in support of its acquisition of Hyva. Again, the bond issue was only possible because creditors in the US were convinced by the company's solid manufacturing business model, European roots (although the majority of revenue comes from Asia) and US dollar revenue streams.

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• Topics
• Financing
• Southeast Asia
• Technology
• TMT
• Structured finance
• TPG Capital
• Singapore
• Affinity Equity Partners
• KKR