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Zayo amends loan, permitting 360networks purchase and new debt
By Sara Rosenberg
New York, Nov. 21 - Zayo Group LLC amended its credit facility, allowing for the acquisition of 360networks Holdings (USA) Inc. as well as the incurrence of additional debt, and revising covenants, according to an 8-K recently filed with the Securities and Exchange Commission.
Specifically, the amendment permits $315 million of secured debt and $60 million of bridge debt for the acquisition, up to $250 million of additional secured debt for future acquisitions, and additional unsecured debt.
Regarding covenants, the senior secured leverage ratio was changed to 4.50 to 1.00 through March 31, 2012, 4.00 to 1.00 through Sept. 30, 2013 and 3.50 to 1.00 thereafter.
Additionally, the fixed charge coverage ratio was revised to 2.25 to 1.00 through Dec. 31, 2012, 2.50 to 1.00 through June 30, 2013, 2.75 to 1.00 through Dec. 31, 2013, 3.00 to 1.00 through Sept. 30, 2014 and 3.25 to 1.00 thereafter.
Also, the restricted payments provision was modified.
The amendment was completed on Nov. 17.
SunTrust Bank is the administrative agent on the deal.
As was previously reported, Zayo is planning on coming to market with a $315 million senior secured term loan B (B2/B) to help fund its $345 million acquisition of 360networks.
The remainder of the purchase price and transaction expenses will be initially funded with a short-term unsecured bridge loan. Zayo plans to repay this debt with cash on hand and revolving credit facility borrowings.
RBC Capital Markets LLC, Barclays Capital Inc. and SunTrust Robinson Humphrey Inc. are the lead arrangers on the term loan B.
Pro forma leverage is anticipated to be around 3.6 times.
Zayo is a Louisville, Colo.-based provider of telecom and internet infrastructure services, including bandwidth infrastructure and network neutral colocation. 360networks is a Seattle-based provider of fiber network and telecom services.
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