NCO revises loan commitment letter, increasing size to $565 million

By Sara Rosenberg

New York, Aug. 14 - NCO Group Inc. revised its senior secured credit facility commitment letter, increasing the total size of the facility to $565 million from the original commitment of $550 million, according to a PREM14A filed with the Securities and Exchange Commission Monday.

Morgan Stanley and JPMorgan are the lead banks on the debt financing.

The facility is now expected to consist of a $100 million five-year revolver and a$465 million seven-year term loan, the filing said. Under the original commitment letter, dated July 18, the facility was expected to have a $450 million term loan along with the $100 million revolver.

Pricing on the revolver and the term loan is expected to be Libor plus 250 basis points, with the revolver carrying a 50 basis point unused fee, the filing said.

Of the total revolver amount, $75 million is committed and $25 million is subject to syndication.

The credit facility has a $100 million accordion feature.

Proceeds from the credit facility will be used to help fund the acquisition of NCO by its chairman and chief executive officer, Michael J. Barrist, in partnership with One Equity Partners II LP, for $27.50 per share in cash. The transaction is valued at about $1.26 billion.

The company still plans on raising $365 million of senior subordinated notes, which will be backed by a $365 million subordinated increasing-rate bridge loan commitment, and using an equity commitment of up to $368.2 million from One Equity Partners as acquisition financing as well.

The transaction is expected to be completed in the fourth quarter, subject to receipt of shareholder approval and customary regulatory approvals as well as satisfaction of other customary closing conditions.

NCO is a Horsham, Pa., provider of business process outsourcing services.

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