Avaya lifts pricing on extended term B-1 debt to Libor plus 600 bps

By Sara Rosenberg

New York, Oct. 26 - Avaya Inc. increased pricing on its proposed extended term loan B-1 debt to Libor plus 600 basis points from Libor plus 525 bps, according to market sources.

The 1.25% Libor floor was left unchanged.

Also, the extended debt now has hard call protection of 102 in year one and 101 in year two, versus the previously proposed 101 soft call protection for one year, sources said.

Furthermore, 50 bps MFN was added to the extended debt with respect to future term loans or extensions.

Under the extension request, the company is looking to push out the maturity on its roughly $1.43 billion term loan B-1 by three years to Oct. 26, 2017.

Pricing on the non-extended term loan B-1 is Libor plus 275 bps with no floor.

The maturity on the extended term loan B-1 borrowings is the same as the maturity on the company's existing term loan B-3, which is priced at Libor plus 450 bps with no Libor floor.

As before, the amendment to the credit facility would allow up to $750 million of additional junior-lien debt under the existing ratio basket, but the use of proceeds of this debt was clarified, sources continued. The company may only use the debt to address existing senior unsecured debt, and as of now, the only senior unsecured debt in the capital structure is the 2015 bonds.

Additionally, term loan B-3 lenders are now being offered a 37.5 bps consent fee, up from 12.5 bps. Revolver and term loan B-1 lenders are still being offered a 12.5 bps consent fee. The extension fee remained at 37.5 bps.

Commitments and consents continued to be due at 5 p.m. ET on Friday.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc., Bank of America Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC and UBS Securities LLC are the lead banks on the deal.

Avaya is a Basking Ridge, N.J.-based provider of business collaboration and communications services.

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