KKR's First Data Said to Get Lender Permission to Sell $500 Million Bonds

First Data Corp., the credit-card processor that KKR & Co. took private in a $27.5 billion takeover in 2007, got lender approval for a debt-reduction plan, according to people familiar with the negotiations.

The company is planning to sell $500 million of notes within 90 days to refinance term loans, according to an Aug. 4 regulatory filing. Citigroup Inc. and Credit Suisse Group AG may begin marketing the bonds as soon as tomorrow, said the people, who declined to be identified because the terms are private.

First Data also got permission to sell as much as $3.5 billion in debt to pay down bonds as it tries to reduce borrowings that helped finance its leveraged buyout. The Atlanta-based company, with about $24 billion of bonds and loans maturing through the next six years, according to data compiled by Bloomberg, joins speculative-grade borrowers seeking to refinance $1 trillion of debt in the same period, according to Barclays Capital data.

The amendment “will provide us the additional flexibility to extend our borrowings, execute various refinancing alternatives to address future upcoming maturities, and take action to improve our overall capital structure,” Chief Financial Officer Ray Winborne said earlier today in a conference call with analysts and investors to discuss second- quarter results.

Amendment Fee

Credit Suisse arranged the amendment to the loan agreement, for which First Data paid a 10 basis-point fee to lenders, one of the people familiar with the talks said. A basis 0.01 percentage point.

Chip Swearngan, a spokesman for First Data, didn’t immediately return a message left at his office or an e-mail seeking comment. He said in an Aug. 4 interview that Citigroup and KKR Capital Markets, a unit of the New York-based private- equity firm, would also help arrange the amendment.

First Data’s $2.2 billion of 9.875 percent notes due in 2015 climbed 0.125 cent to 80.625 cents on the dollar at 5:14 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

High-yield, high-risk debt is rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s.

The company’s second-quarter revenue rose 18 percent to $2.6 billion, according to a regulatory filing today. Net loss for the three months ended June 30 declined to $171.2 million from $195.9 million during the same period last year.

Winborne said First Data has a ratio of consolidated senior secured debt to earnings before interest, taxes, depreciation and amortization of 5 times.

To contact the reporter on this story: Emre Peker in New York at epeker2@bloomberg.net.

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