Masergy lifts first-lien term loan to $347.5 million, updates pricing

By Sara Rosenberg

New York, Dec. 12 – Masergy Communications Inc. upsized its seven-year covenant-light first-lien term loan (B2/B) to $347.5 million from $332.5 million and firmed pricing at Libor plus 450 basis points, the low end of the Libor plus 450 bps to 475 bps talk, according to a market source.

Furthermore, the original issue discount on the first-lien term loan was changed to 99.5 from 99, the source said.

Also, while pricing on the company’s $140 million eight-year covenant-light second-lien term loan (Caa2/CCC+) remained at Libor plus 850 bps with a 1% Libor floor, the discount was revised to 99 from 98.5.

The first-lien term loan still has a 1% Libor floor and 101 soft call protection for six months, and the second-lien term loan still has call protection of 102 in year one and 101 in year two.

The company’s now $537.5 million credit facility, up from $522.5 million, also provides for a $50 million five-year revolver (B2/B).

Jefferies Finance LLC and Antares Capital are the leads on the deal, with Jefferies the left lead on the first-lien loan and Antares the left lead on the second-lien loan.

Recommitments were scheduled to be due at 4 p.m. ET on Monday, the source added.

Proceeds will be used to help fund the buyout of the company by Berkshire Partners LLC.

Due to the first-lien term loan upsizing, the cash equity for the transaction is decreasing by $15 million.

Masergy is a Plano, Texas-based provider of hybrid networking, managed security and cloud communications solutions.

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