Avaya extends $135 million term loan B-1 borrowings to October 2017

By Sara Rosenberg

New York, Nov. 2 - Avaya Inc. completed its amendment and extension transaction, pushing out by three years the maturity on about $135 million of its term loan B-1, according to an 8-K filed with the Securities and Exchange Commission on Friday.

The new maturity date is Oct. 26, 2017.

Pricing on the new extended term loan B-4 is Libor plus 600 basis points with a 1.25% Libor floor. The loan has hard call protection of 102 in year one and 101 in year two.

During the negotiation process, the spread on the term loan B-4 was lifted from talk of Libor plus 525 bps and the call protection was revised from 101 soft call for one year.

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

The extended term loan B-4 has 50 bps MFN with respect to future term loans or extensions.

The maturity on the extended term loan B-4 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.

Also, the amendment to the credit facility allows up to $750 million of additional junior-lien debt under the existing ratio basket, but that debt may only be used to address existing senior unsecured debt. As of now, the only senior unsecured debt in the capital structure is the 2015 bonds.

Term loan B-3 lenders were offered a 37.5 bps consent fee, revised from 12.5 bps during negotiations. Revolver and term loan B-1 were offered a 12.5 bps consent fee. The extension fee was 37.5 bps.

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 led the deal that was completed on Oct. 29.

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

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