BASIS POINT-Advantage prepays as GST Autoleather improves

HONG KONG, May 10 (BestGrowthStock) – Private equity firm Advantage
Partners Inc has made three voluntary repayments totalling
$39.2 million on its GST Autoleather Inc asset since September
2009, as the company’s performance continues to improve,
according to a source close to the deal.

The sponsor made a voluntary prepayment of around $8.5
million at the end of September 2009 on the debt that backed
its 2008 leveraged buyout of the auto-seat cover maker. That
September payment was followed by voluntary prepayments of $9
million in December and an April prepayment of $21.7 million.

According to the source, the company is under 1.5 times
leveraged, and its EBITDA is above the level it stood at when
it was acquired. The sponsor is also said to be preparing to
recapitalise GST Autoleather.

At the height of the financial crisis, Advantage was forced
to make a payment of $39.1 million to avoid tripping covenants
on the debt, but a shift to low-cost manufacturing bases, the
low cost of materials over the past year, and strong relations
with General Motors [GM.UL], Toyota Motor Corp (7203.T: ), as
well as BYD Co (1211.HK: ) and Great Wall Motor Co (2333.HK: ) in
China had added strongly to earnings, said the source.

The prepayments all came off the senior tranche of the $172
million debt package backing the buyout. That tranche is now
down to $25 million and the source said the sponsor expected to
half that again by the end of the year. Pricing on the tranche
has dropped to 200bp over Libor.

At launch, it paid a margin of 500bp over Libor and
front-end fees of 125bp for lead arrangers committing $15
million or more, and 100bp for arrangers committing $10-14
million. The $172 million total debt was divided into a $130
million six-year senior term loan and a $42 million mezzanine
tranche.

Of the mezzanine, $34 million remains in place, held by GE
Capital and ING Bank. Lenders to the senior debt were: MLAs GE
Capital and ING Bank; lead arrangers Development Bank of Japan
and Tokyo Star Bank; Woori Bank and Woori Global Markets Asia;
and State Bank of India.

Funding for the deal was through GST Autoleather Cayman I
Ltd.

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(Reporting by Stephen Aldred; Editing by Chris Lewis)

BASIS POINT-Advantage prepays as GST Autoleather improves