Cincinnati Bell talks term loan at Libor plus 375 bps, revolver at Libor plus 350 bps

By Sara Rosenberg

New York, May 24 - Cincinnati Bell Inc. launched on Monday its $760 million seven-year term loan at Libor plus 375 basis points and its $210 million four-year revolver at Libor plus 350 bps, according to a market source.

The term loan includes a 1.5% Libor floor and is being offered at an original issue discount talked in the 98 to 99 context, the source said.

The revolver has a 75 bps unused fee.

Bank of America, Morgan Stanley and Barclays are the lead banks on the $970 million senior secured deal, with Bank of America the left lead.

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

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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