Avago Technologies launches $4.6 billion term B at Libor plus 325 bps

By Sara Rosenberg

New York, April 3 - Avago Technologies Ltd. launched on Thursday its $4.6 billion seven-year term loan B with price talk of Libor plus 325 basis points with a 0.75% Libor floor and an original issue discount of 99, according to a market source.

Included in the B loan is 101 soft call protection for six months.

The company's $5.1 billion credit facility (Ba1/BBB-) also provides for a $500 million five-year revolver.

Commitments are due on April 15, the source said.

Deutsche Bank Securities Inc., Barclays, Bank of America Merrill Lynch and Citigroup Global Markets Inc. are the bookrunners on the deal.

Proceeds will be used to help fund the acquisition of LSI Corp. for $11.15 per share in an all-cash transaction valued at $6.6 billion.

Other funds for the transaction are expected come from $1 billion of cash and a $1 billion investment by Silver Lake Partners in the form of 2% unsecured notes convertible at $48.04 per share or preferred stock.

Closing is expected in the first half of this year, subject to regulatory approvals in various jurisdictions, LSI stockholder approval and customary conditions.

Avago is a Singapore-based designer, developer and supplier of analog semiconductor devices. LSI is a San Jose, Calif.-based designer of semiconductors and software that accelerate storage and networking in datacenters, mobile networks and client computing.

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