LightSquared talks $1.75 billion first-lien loan at Libor plus 775 bps

By Sara Rosenberg

New York, May 12 – LightSquared is talking its $1.75 billion five-year first-lien term loan at Libor plus 775 basis points with a 1% Libor floor and an original issue discount of 97 ahead of its bank meeting at 12:30 p.m. ET in New York on Wednesday, according to a market source.

Included in the loan is a ticking fee of 1% for the first 120 days and an additional 1% after 120 days, the source said.

The first-lien term loan is non-callable for one year, then at 102 in year two and 101 in year three, and has a springing maturity that is six months inside of second-lien debt.

Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and Morgan Stanley Senior Funding Inc. are the lead banks on the deal.

Proceeds will be used to fund the company’s exit from Chapter 11 and refinance debtor-in-possession facilities.

Commitments are due on May 27.

LightSquared is a Reston, Va.-based wireless communications company. The company filed for bankruptcy on May 14, 2012 under Chapter 11 case number 12-12080.

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