Voyage Digital firms U.S. dollar and New Zealand dollar loan sizes, updates pricing

By Sara Rosenberg

New York, March 3 – Voyage Digital (NZ) Ltd. set the split of its NZ$1.35 billion equivalent U.S. and New Zealand dollar seven-year senior secured covenant-lite term loan B (Ba3/B+) at $510 million and NZ$600 million, according to a market source.

Pricing on the U.S. term loan was increased to SOFR plus 450 basis points from talk in the range of SOFR plus 400 bps to 425 bps and the original issue discount widened to 98.5 from talk in the range of 99 to 99.5, the source said.

Also, ticking fees were added to the term loan of half the margin from days 76 to 90 and the full margin thereafter, and the start of the pricing grid on the U.S. term loan was revised to the second full fiscal quarter from after delivery of compliance certificate for first full fiscal quarter following the closing date.

In addition, MFN was changed to 50 bps for 18 months from 75 bps lower all-in yield for 12 months, the MFN carve-out for excluded incremental facilities was removed, the incremental facility inside maturity basket was removed, the “no worse off” leverage prong was eliminated from incremental/ratio debt and acquisition debt, the interest coverage ratio test option was removed from incremental/ratio debt, and incremental/ratio debt was modified to the greater of NZ$88.5 million and 30% of LTM EBITDA from having no cap on non-guarantor incremental/ratio debt.

Furthermore, the excess cash flow sweep was changed to have step-downs to 25% and 0% at 0.5x and 1x inside closing date first-lien net leverage from step-downs at 0.5x and 0.75x inside closing date first-lien net leverage, asset sale sweep step-downs were revised to 50% and 0% at 0.5x and 1x inside closing date first-lien net leverage from step-downs at 0.25x and 0.5x inside closing date first-lien net leverage, and the repayment of debt of non-guarantor subsidiaries will no longer be treated as “reinvestment” under the asset sale sweep reinvestment rights, the source continued.

Contribution debt/liens basket was revised to 100% from 200%, leverage basket restricted payments are permitted at 1x inside closing date total net leverage, instead of at 0.5x inside closing date total net leverage, leverage basket investments are permitted at 0.75x inside closing date total net leverage, as opposed to at 0.25x inside closing date total net leverage, and investments in non-guarantor restricted subsidiaries went from uncapped to the greater of NZ$221.25 million and 75% of LTM EBITDA.

J. Crew protection was revised to all core assets, Chewy and Serta protection were added, EBITDA add back for “run rate” costs savings, synergies and profits under recurring contracts and pandemic normalization items changed from uncapped to a shared cap of 25% of consolidated EBITDA other than to the extent relating to the transactions, and quarterly lender calls were added.

The U.S. term loan has 0 bps CSA, a 0.5% floor, 101 soft call protection for six months and amortization of 1% per annum.

Morgan Stanley Senior Funding Inc., Natixis, UBS Investment Bank, Deutsche Bank Securities Inc. and ING are the bookrunners on the deal. Global Loan Agency Servicing is the administrative agent.

Recommitments were scheduled to be due at 1:30 p.m. ET on Thursday, the source added.

Proceeds will be used to finance the acquisition of Two Degrees Group Ltd. and repay existing debt at Two Degrees and Voyage Australia Pty Ltd.

Voyage Digital, a joint venture between Macquarie Asset Management and Aware Super, is a telecommunications company.

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