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Hughes Network $375 million credit facility to launch Tuesday
By Sara Rosenberg
St. Louis, April 22 - Hughes Network Systems LLC is scheduled to hold a bank meeting on Tuesday to launch its proposed $375 million credit facility, according to a market source.
JPMorgan and Bear Stearns are the lead banks on the deal, with JPMorgan the left lead.
The facility consists of a $50 million six-year revolving credit facility, a $275 million seven-year first-lien term loan and a $50 million eight-year second-lien term loan, the source said.
The $325 million of term loan debt replaces the company's recently pulled $325 million offering of eight-year senior notes. The notes, which were tabled because of the back up in the bond market, had been talked late in the April 11 week at 9¾% to 10%.
Proceeds from the term loans will be used to help fund the transfer of Hughes Network Systems' assets to Hughes Network Systems LLC, a newly formed company that will be 50% owned by SkyTerra Communications Inc. and 50% owned by The DirecTV Group.
The revolver is expected to be undrawn at closing.
When the joint venture was first announced late last year, it was thought that Hughes would get a $375 million credit facility consisting of a $300 million term loan and a $75 million revolver, but financing plans shifted toward the high-yield market early this month, at which time it was thought that the only bank debt that Hughes would get was a $50 million revolver.
Although news of the $50 million revolver has been out in the marketplace for a little while now, the tranche will be presented to lenders on Tuesday along with the new term loan tranches, the source explained.
Hughes Network Systems is a Germantown, Md.-based provider of broadband satellite networks and services.
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