CyrusOne parties close $10.5 billion revolving, term loan agreements

By Marisa Wong

Los Angeles, March 25 – CyrusOne Inc.’s new parent company, Cavalry Parent LP, entered into a credit agreement on March 25 for a $1.5 billion senior secured multi-currency revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The acquisition of CyrusOne by funds managed by KKR and Global Infrastructure Partners, valued at about $15 billion, closed on Friday, according to a press release. Under the merger agreement, CyrusOne became a wholly owned subsidiary of Cavalry.

Up to $200 million of the revolver may be used to issue letters of credit.

The revolver also includes an accordion feature that allows the company to obtain additional revolving commitments as long as the ratio of the consolidated total net debt to consolidated property value of real property held by the company and its subsidiaries does not exceed a certain percentage on a pro forma basis.

Revolver borrowings may be in U.S. dollars, euros, pounds sterling, Canadian dollars, Japanese yen and Swiss francs.

Interest rates are based on a floating rate or base rate, plus a margin.

Goldman Sachs Bank USA is administrative agent and collateral agent; Goldman Sachs Bank, Barclays Bank plc, Wells Fargo Bank, NA and KKR Capital Markets LLC are global coordinating lead arrangers and joint lead bookrunners; Citigroup Global Markets Inc. is coordinating lead arranger and joint lead bookrunner; and BMO Capital Markets Corp., Banco Santander, SA, Societe Generale, Sumitomo Mitsui Banking Corp. and TD Securities (USA) LLC are joint lead arrangers and joint bookrunners.

Proceeds from the revolver were available on the closing date to fund some funding shortfalls and transaction expenses in connection with the merger, to fund certain reserves and to fund working capital adjustments and reimbursements for capital expenditures under the merger agreement. Loan proceeds will be available from and after the closing date for working capital and any general corporate purpose, including to repay the obligations outstanding of some of Cavalry’s subsidiaries under existing debt facilities and to cash collateralize some outstanding letters of credit.

Balance sheet loan

Some subsidiaries of CyrusOne LP entered into a secured loan agreement on March 25 for a loan in the maximum principal amount of $5.5 billion.

The balance sheet loan is comprised of an initial advance in the amount of $4.5 billion and up to $1 billion of future advances for certain capital improvement, tenant improvement and leasing costs.

Borrowing will be made in U.S. dollars.

Interest is based on term SOFR plus a margin.

The balance sheet loan agreement includes requirements to maintain financial ratios.

Goldman Sachs Bank is administrative agent, with BMO Capital Markets, Banco Santander, Societe Generale, Sumitomo and TD Securities as joint lead arrangers and joint bookrunners.

Proceeds were used, among other things, to pay a portion of the purchase price in connection with the merger and for other corporate purposes.

Short tenor loan

Some subsidiaries of CyrusOne LP entered into a secured loan agreement for a maximum principal amount of $3.5 billion, all of which was disbursed on the March 25 closing date.

Borrowings under the short tenor loan agreement will be in U.S. dollars.

Interest is based on term SOFR plus an initial margin that escalates every six months.

The loan agreement requires maintenance of financial ratios.

Goldman Sachs Bank is administrative agent, with BMO Capital, Banco Santander, Societe Generale, Sumitomo and TD Securities as joint lead arrangers and joint bookrunners.

Proceeds were used, among other things, to pay a portion of the purchase price in connection with the merger and for other corporate purposes.

E.U. facilities

CyrusOne Dutch Holdings BV, a subsidiary of CyrusOne LP, entered into a facilities agreement for drawings in euro and sterling in the maximum principal amounts of €839,438,251 and £412,702,434, respectively, to be used for certain data center assets in England, Ireland, the Netherlands and Germany.

An initial advance was disbursed on March 25, along with a portion of the remaining future advance.

Proceeds were used, among other things, to refinance existing debt and for other corporate purposes.

Interest on the secured loan is based on Euribor for amounts drawn in euros and Sonia for amounts drawn in sterling, plus an initial margin.

Mount Street Mortgage Servicing Ltd. is facility agent and security agent, and Barclays Bank, Citibank NA, London Branch, Goldman Sachs Bank, Wells Fargo Bank International Unlimited Co., Banco Santander, BMO Capital Markets, Societe Generale, Sumitomo Mitsui Banking Corp., Brussels Branch and TD Securities acted as joint lead arrangers.

On the closing date, in connection with the completion of the merger and entry into the four new loan agreements, CyrusOne LP terminated its existing credit agreement that provided for a $1.4 billion senior unsecured multi-currency revolver, senior unsecured term loans due 2023 in a dollar equivalent principal amount of $400 million and senior unsecured term loans due 2025 in a principal amount of $700 million.

The previous loans were paid in full, and the company did not incur any material early prepayment or termination penalties as a result of those terminations.

CyrusOne is a Dallas-based global REIT specializing in design, construction and operation of data centers worldwide.

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