By Paul Deckelman
New York, May 1 - Zayo Group, LLC and Zayo Capital, Inc. priced a $350 million issue of senior notes due 2025 (Ca1/B-) at par to yield 6 3/8% on Friday, high-yield syndicate sources said.
The notes priced at the tight end of price talk suggesting a yield between 6 3/8% and 6½%.
The quick-to-market offering priced just hours after the planned deal had been announced and marketed to potential investors via a mid-morning conference call.
Morgan Stanley & Co., Barclays Capital Inc., Goldman Sachs & Co., Citigroup Global Markets Inc., RBC Capital Markets Corp. and SunTrust Robinson Humphrey, Inc. were the bookrunners on the deal, which was being offered to investors under Rule 144A with registration rights and Regulation S.
The notes come with five years of call protection and an equity clawback provision allowing the redemption of up to 40% on the issue.
The issuers, subsidiaries of Boulder, Colo.-based Zayo Group Holdings, Inc., an international provider of bandwidth infrastructure services, intend to use the net proceeds from the bond deal to repay approximately $345 million of term loan borrowings.
Concurrently with the closing of the notes, Zayo expects to enter into an amendment and restatement of its credit agreement, which is anticipated to reduce Zayo’s interest expense, extend the maturity of the term loan facility to 2021, align certain covenants with Zayo’s recently issued 6% senior notes due 2023 and add additional covenant flexibility.
| Issuers: | Zayo Group, LLC and Zayo Capital, Inc.
|
| Amount: | $350 million
|
| Maturity: | May 15, 2025
|
| Securities: | Senior notes
|
| Bookrunners: | Morgan Stanley & Co., Barclays Capital Inc., Goldman Sachs & Co., Citigroup Global Markets Inc., RBC Capital Markets Corp. and SunTrust Robinson Humphrey, Inc.
|
| Co-manager: | J.P. Morgan Securities LLC
|
| Coupon | 6 3/8%
|
| Price: | Par
|
| Yield: | 6 3/8%
|
| Spread: | 426 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps until May 15, 2020, then callable at 103.188%, declining on May 15, 2021 to 102.125%, on May 15, 2022 to 101.063%, and on May 15, 2023 to par
|
| Equity clawback: | For up to 40% of the issue until May 15, 2018 at 106.375
|
| Trade date: | May 1
|
| Settlement date: | May 6 (T+3)
|
| Ratings: | Moody’s: Ca1
|
| Standard & Poor’s: B-
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
| Price talk: | 6 3/8% to 6½% area
|
| Marketing: | Quick to market
|
|
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
