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Skype increases term loan by $100 million to cover litigation expense
By Sara Rosenberg
New York, Nov. 9 - Skype Technologies (Springboard Finance LLC) increased its five-year term loan to $700 million from $600 million to pay for a settlement agreement, according to a market source.
The settlement was reached with Joltid Ltd. and Joost N.V., giving Skype ownership over all software previously licensed from Joltid and ending all litigation against the investor group and eBay Inc. at the closing of the acquisition.
The extra $100 million of term loan funds is being provided by eBay and the investor group led by Silver Lake that is now acquiring a 56% stake, down from 65% as a result of the settlement, in Skype from eBay.
eBay and the sponsors are not allowed to sell that additional $100 million of term loan debt for six months, the source said.
Pricing on the term loan was left unchanged at Libor plus 750 basis points with a 2% Libor floor and an original issue discount of 96.
Skype's now $730 million credit facility (B1/B) also includes a $30 million four-year revolver.
JPMorgan, Barclays and RBC Capital Markets are the lead banks on the deal.
Skype is a Luxembourg-based software that enables individuals and businesses to make free video and voice calls, send instant messages and share files with other Skype users.
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