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Zayo downsizes two-part notes offering to $2.58 billion, sets talk; books close noon ET Thursday
By Paul A. Harris
Portland, Ore., Feb. 20 – Zayo Group Holdings Inc. downsized its two-part offering of high-yield notes to $2.58 billion from $3.08 billion and set price talk on Thursday, according to market sources.
The secured portion of the deal upsized to $1.5 billion from $1 billion. It features seven-year senior secured notes (B1/B) talked to yield 4% to 4¼%, inside of earlier guidance in the 4½% area.
The unsecured tranche downsized to $1.08 billion from $2.08 billion. It features eight-year senior unsecured notes (Caa1/CCC+) talked to yield in the 6¼% area, tighter than earlier guidance in the 6¾% area.
Books close at noon ET on Thursday.
Lead left bookrunner Morgan Stanley & Co. LLC will bill and deliver. Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc. and TD Securities (USA) LLC are the joint bookrunners.
BNP Paribas Securities Corp., Citizens Capital Markets Inc., Fifth Third Securities Inc., ING Financial Markets LLC, MUFG, Natixis Securities Americas LLC, Nomura Securities International LLC and Scotia Capital (USA) Inc. are the co-managers.
The secured notes become callable after one year at 102 and feature a special call that would allow the issuer to redeem 10% of the notes at 103 during the non-call period.
The unsecured notes become callable after three years at par plus 50% of the coupon.
Along with downsizing its high-yield notes offering, the company upsized its U.S. seven-year covenant-lite first-lien term loan to $4.75 billion from $4.235 billion.
Proceeds from the notes, the U.S. term loan and a €750 million term loan will be used to help fund the leveraged buyout of Zayo by Digital Colony Partners and the EQT Infrastructure IV fund.
The issuing entity for the notes will be Front Range BidCo, Inc., which is to be merged with and into Zayo, a Boulder, Colo.-based provider of mission-critical bandwidth to companies.
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