API Technologies downsizes term loan B to $170 million, ups pricing

By Sara Rosenberg

New York, June 13 - API Technologies Inc. reduced its five-year term loan B to $170 million from $200 million and increased pricing to Libor plus 625 basis points from talk of Libor plus 450 bps to 475 bps, according to a market source.

Also, the Libor floor on the B loan was lifted to 1.5% from 1.25%, and the original issue discount widened to 96½ from 99 to 991/2.

The 101 soft call protection for one year was left unchanged.

The company's now $185 million senior credit facility (B2/BB-) also includes a $15 million three-year revolver that was downsized from $20 million.

Commitments are due at the end of the day on Thursday.

Financial covenants include a maximum total leverage ratio and a minimum interest coverage ratio.

Morgan Stanley & Co. Inc. is the lead bank on the deal.

Proceeds were used to help fund the already completed acquisition of Spectrum Control Inc. for $20 per share. The total purchase price was about $270 million.

As a result of the term loan downsizing, more equity will be used for the acquisition, the source added.

API is a Ronkonkoma, N.Y.-based provider of secure communications, electronic components and subsystems and contract manufacturing services to the defense and aerospace industries. Spectrum is a Fairview, Pa.-based designer and manufacturer of high performance, custom services for the defense, aerospace, industrial and medical industries.

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