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Zayo firms pricing on $315 million term loan B at Libor plus 550 bps
By Sara Rosenberg
New York, Nov. 22 - Zayo Group LLC set pricing on its $315 million five-year senior secured term loan B (B2/B) at Libor plus 550 basis points with a 1.5% Libor floor and original issue discount of 97, according to a market source.
The loan includes 101 soft call protection for one year.
RBC Capital Markets LLC, Barclays Capital Inc. and SunTrust Robinson Humphrey Inc. are the lead arrangers on the deal.
The B loan was syndicated to a select group of investors. There was no bank meeting to launch the deal.
Proceeds will be used to help fund the acquisition of 360networks Holdings (USA) Inc. for $345 million.
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.
Pro forma leverage is expected to be around 3.6 times.
As previously reported, on Nov. 17, the company amended its existing credit facility to allow for the acquisition and the new debt.
Also, the amendment changed the senior secured leverage ratio 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; and the fixed charge coverage ratio 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.
Zayo is a Louisville, Colo.-based provider of telecom and internet infrastructure services, including bandwidth infrastructure and network neutral collocation. 360networks is a Seattle-based provider of fiber network and telecom services.
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