GTT Communications to launch $775 million credit facility on Tuesday

By Sara Rosenberg

New York, Nov. 23 – GTT Communications Inc. scheduled a bank meeting for 2 p.m. ET in New York on Tuesday to launch its proposed $775 million credit facility, according to a market source.

KeyBanc Capital Markets Inc., Credit Suisse Securities (USA) LLC and SunTrust Robinson Humphrey Inc. are the lead banks on the debt.

The credit facility consists of a $75 million revolver and a $700 million term loan B.

Proceeds will be used to help fund the acquisition of Hibernia Networks and refinance existing debt.

Based on filings with the Securities and Exchange Commission, other funds for the transaction are expected to come from $300 million of senior unsecured notes, which are backed by a senior unsecured bridge loan facility.

At closing, the ratio of total net debt to adjusted EBITDA is anticipated to be about 4.5 times using pro forma combined third-quarter 2016 annualized adjusted EBITDA plus expected cost synergies.

Within one year after closing, the company expects the ratio of total net debt to adjusted EBITDA to be at or below 4 times due to continued adjusted EBITDA growth and cash generation.

Closing is expected by the end of first quarter 2017, subject to regulatory approvals and other customary conditions.

GTT is a McLean, Va.-based cloud networking provider. Hibernia is a provider of high-speed network connectivity solutions and an owner of terrestrial and subsea fiber assets.

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