Web.com widens discount talk on first-, second-lien loans to 88-89

By Sara Rosenberg

New York, Oct. 24 - Web.com Group Inc. has revised original issue discount guidance on its $600 million six-year first-lien term loan B (Ba3/B) and $150 million seven-year second-lien term loan (B3/CCC+) to 88 to 89, according to a market source.

Initially, the two term loans were talked at a discount of 96½ to 97, after which unofficial chatter was floating around in the low-90s context.

Pricing on the first-lien term loan remained at Libor plus 550 basis points with a 1.5% Libor floor, and the second-lien term loan remained at Libor plus 950 bps with a 1.5% Libor floor.

As before, the first-lien term B has 101 soft call protection for one year, while the second-lien loan is noncallable for one year, then at 103 in year two, 102 in year three and 101 in year four.

Commitments are due at noon ET on Wednesday.

The company's $800 million senior secured credit facility also includes a $50 million five-year revolver (Ba3/B).

J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc. are the lead banks on the deal.

Proceeds will be used to fund the acquisition of a majority stake in Network Solutions from General Atlantic LLC for $405 million in cash and 18 million shares of common stock, to refinance existing debt and for general corporate purposes.

Completion of the acquisition is expected in the fourth quarter, subject to shareholder and regulatory approvals and customary conditions.

Shareholder approval will be sought at a special meeting on Tuesday, and regulatory approval has already been received.

Leverage is 4.0 times through the first lien and 5.0 times through the second lien.

Web.com is a Jacksonville, Fla.-based provider of internet services and online marketing services. Network Solutions is a Herndon, Va.-based provider of website services, online marketing and domain-name registration.

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