Web.com details $350 million refinanced term loan and revolver

By Marisa Wong

Madison, Wis., Sept. 10 – Web.com Group, Inc. disclosed more details on its refinanced credit facilities in an 8-K filed Wednesday with the Securities and Exchange Commission.

The new credit agreement, which provides for a $200 million secured term loan and $150 million secured revolving line of credit, was completed on Tuesday.

The joint lead arrangers of the facility are J.P. Morgan Securities LLC and SunTrust Robinson Humphrey, Inc., also joint bookrunners with Region Capital Markets, Fifth Third Bank, Merrill Lynch, Pierce, Fenner & Smith Inc., Barclays Bank plc, Wells Fargo Securities, LLC and RBC Capital Markets. JPMorgan Chase Bank, NA and SunTrust Bank are the co-syndication agents, Regions Bank, Fifth Third Bank, Bank of America, NA, Barclays Bank plc, Wells Fargo Bank, NA, Royal Bank of Canada, Deutsche Bank Securities Inc. and Compass Bank are co-documentation agents, and JPMorgan Chase Bank, NA is the administrative agent.

Loans will bear interest at floating rates, subject to adjustment quarterly, based on the company’s first-lien net leverage ratio. The applicable margin ranges from 150 basis points to 250 bps.

The initial rate is Libor plus 225 basis points, as previously announced.

There is also a commitment fee that ranges from 30 bps to 45 bps, also based on the consolidated first-lien net leverage ratio. The commitment fee is currently 40 bps.

The credit facilities mature Sept. 9, 2019.

The company is permitted to make voluntary prepayments on the revolver and term loan at any time without payment of a premium. The company is required to make mandatory prepayments of the term loan with cash proceeds from asset sales and issuances of debt.

Beginning Dec. 31, the term loan will amortize in equal quarterly installments in an aggregate annual amount equal to 2.5% during the first year, 5% during the second year, 7.5% during the third year and 10% during the fourth and fifth years, with any remaining balance payable on the maturity date.

The credit agreement contains financial covenants that require the company to not exceed a maximum consolidated first lien net leverage ratio and to maintain a minimum consolidated interest coverage ratio.

The company used proceeds of the term loan, initial borrowings of $109 million under the revolver and cash on hand to repay existing loans under its previous credit agreement. In connection with the repayment, the company terminated the prior facility.

The company will use future borrowings under the revolver, if any, for working capital and general corporate purposes.

The Jacksonville, Fla., company said it incurred about $4 million in one-time fees and expenses in connection with the refinancing.

Web.com is a provider of internet services and online marketing solutions for small businesses.

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