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United Test & Assembly Seeks $600M Bond

Singapore precision engineering firm United Test & Assembly Center is the latest private equity-backed company in Asia to turn to the high-yield bond markets to refinance buyout loan debt, seeking to raise around $600 million, sources with knowledge of the matter told Reuters. UTAC was acquired by buyout funds Affinity Equity Partners and TPG Capital for $1.25 billion in 2007 using loan debt of around $725 million.

(Reuters) – Singapore precision engineering firm United Test & Assembly Center (UTAC) is the latest private equity-backed company in Asia to turn to the high-yield bond markets to refinance buyout loan debt, seeking to raise around $600 million, sources with knowledge of the matter told Reuters.

UTAC was acquired by buyout funds Affinity Equity Partners and TPG Capital for $1.25 billion in 2007 using loan debt of around $725 million.

The debt now has to be serviced by UTAC, which faces an October 2013 refinancing deadline on $150 million of a type of loan known as a revolving credit.

Four banks – Bank of America Merrill Lynch, Credit Suisse, JP Morgan and UBS – have agreed to replace that facility with a new revolving credit, and are expected to get the mandate on a U.S. high-yield bond, Thomson Reuters Basis Point reported on Monday.

Affinity and TPG did not immediately respond to requests for comment. The sources declined to be named as discussions were private.

UTAC was lining up a $600 million Singapore listing in 2010, but cancelled the offering as markets deteriorated.

Companies in Asia are tapping non-traditional funding avenues to overcome difficult initial public offering and bank loans markets.

Earlier this year MMI International, a technology company owned by private equity firm KKR & Co L.P., became the first firm in Asia to use a $300 million high-yield bond to take out a buyout loan.