(Bloomberg) -- Goldman Sachs Group Inc has been reaching out to direct lenders on behalf of NEOTech, an electronics manufacturing business, to help refinance its existing debt, according to people with knowledge of the matter.
NEOTech is seeking at least $300 million of private debt to refinance its existing broadly syndicated loans, said the people also said, who asked not to be identified because they’re not authorized to speak about the information publicly.
A representative for Goldman Sachs declined to comment. NEOTech did not respond to a request for comment.
The company, which is rated CCC+, struggled with demand after the Covid-19 pandemic and required equity cures to remain in compliance with its leverage covenants, according to an S&P Global Ratings report from 2021. NEOTech is owned by its chief executive officer, Sudesh Arora, according to its website.
More under-performing firms have been turning to direct lenders to refinance existing debt, as a majority of broadly syndicated debt holders are subject to limits on how much debt rated CCC they can hold. In October, Pure Fishing received a $750 million private loan, which took out the syndicated debt after it started trading into distressed levels.
Pricing on NEOTech’s existing $325 million term loan, which was originated in 2019, is 6.25 percentage points over the Secured Overnight Financing Rate plus a credit spread adjustment, according to data compiled by Bloomberg.
More banks have been advising on private credit deals, particularly to help line up potential lenders for the deals, in a bid to keep business as more leveraged buyouts are financed with direct loans.
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