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Avago Technologies $4.6 billion seven-year term loan prices at 99.5
By Paul A. Harris
Portland, Ore., April 16 - Avago Technologies Ltd. priced its $4.6 billion Libor plus 300 basis points seven-year term loan B (Ba1/BBB-/BBB-) at 99.5 on Wednesday, according to a market source.
The deal traded to par bid, par ½ offered.
The Libor spread came on top of spread talk that was tightened from 325 bps.
Additionally, the original issue discount on the term loan was tightened to 99½ from 99, and the 101 soft call protection was extended to one year from six months, the source said.
Furthermore, the term loan saw the addition of a ticking fee of half the spread starting on June 1 and the full spread starting on July 1.
Also added to the loan was a 24-month MFN sunset provision and LuxCo as a co-borrower.
The term loan B still has a 0.75% Libor floor.
The company's $5.1 billion credit facility (Ba1/BBB-/BBB-) also provides for a $500 million Libor plus 250 bps five-year revolver.
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 to 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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