Cincinnati Bell sets Monday launch for $970 million credit facility

By Sara Rosenberg

New York, May 21 - Cincinnati Bell Inc. has scheduled a bank meeting for Monday to launch its proposed $970 million senior secured credit facility, according to a market source.

Bank of America, Morgan Stanley and Barclays are the lead banks on the deal, with Bank of America the left lead.

The facility consists of a $210 million four-year revolver and a $760 million seven-year term loan, the source said.

Proceeds will be used to fund the acquisition of CyrusOne, refinance existing bank debt and for general corporate purposes.

No official price talk is available as of yet on the new deal, the source said. However, company officials did say in a recent conference call that the term loan is expected to be priced in the Libor plus 350 basis points area, compared to pricing of Libor plus 150 bps on its existing term loan.

Pro forma LTM leverage will be 5.1 times, and the company will have no significant maturities until 2015.

For the full year 2009, CyrusOne, a data center operator, generated revenue of $58 million. Based on the CyrusOne unaudited first-quarter results of 2010 annualized, the company would have annual revenue of $73 million, operating income of $27 million and adjusted EBITDA of $42 million.

Closing on the transaction is targeted by the end of the second quarter, subject to customary conditions, including regulatory approvals.

Cincinnati Bell is a Cincinnati, Ohio-based provider of integrated communications services.

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