Vocus revises term B tranching, firms U.S. loan at Libor plus 350 bps

By Sara Rosenberg

New York, May 27 – Vocus set its U.S. seven-year senior secured covenant-lite term loan B size at $725 million, added a $25 million delayed-draw first-lien term loan, and set its Australian dollar seven-year senior secured covenant-lite term loan B size at A$925 million and its Australian delayed-draw term loan amount at A$118 million, according to a market source.

A planned euro term loan B was removed from the capital structure.

At launch, the deal was described as a A$2 billion equivalent U.S., euro and Australian dollar seven-year senior secured covenant-lite term loan, including a A$150 million equivalent delayed-draw tranche.

Pricing on the U.S. term loan debt firmed at Libor plus 350 basis points, the low end of the Libor plus 350 bps to 375 bps talk, and the pricing step-downs were eliminated, the source said.

In addition, changes were made to documentation, including adding Chewy protection, J. Crew protection and Serta protection, setting MFN at 50 bps for 12 months with no carveouts, capping EBITDA adjustments at 25% with an 18-month look forward period, reducing the contribution debt basket to 100% from 200%, removing “no worse off” from the ratio debt incurrence test, changing the junior/unsecured incremental debt to a leverage test from an interest coverage ratio test, and requiring quarterly conference calls and management discussion and analysis, the source continued.

The U.S. term loan debt still has a 0.5% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

Pricing on the Australian dollar term debt is BBSY plus 400 bps with a 0.5% floor and a discount of 99.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc. and Natixis are the joint lead arrangers and bookrunners on the deal.

Commitments were scheduled to be due at noon ET on Thursday, the source added.

Proceeds will be used to help fund the buyout of the company by Macquarie Infrastructure and Real Assets and Aware Super for A$5.50 per share and pay related fees and expenses. The buyout has an enterprise value of A$4.599 billion on a fully diluted basis.

Vocus is a Melbourne, Australia-based fibre and network solutions provider.

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