Arris Group Inc. (ARRS), a cable-equipment maker, set the rate it will pay on a $925 million term loan backing the purchase of Google Inc. (GOOG)’s Motorola Home business, according to a person with knowledge of the transaction.
The seven-year debt will pay interest at 2.75 percentage points to 3 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 75 basis point floor. A basis point is 0.01 percentage point.
Arris is proposing to sell the loan at 99.5 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, the person said.
Bank of America Corp. and Royal Bank of Canada are arranging the financing for the Suwanee, Georgia-based company which also includes a $1 billion term loan A and a $250 million revolving line of credit, according to data compiled by Bloomberg. Investors have until Feb. 5 to let the banks know if they will participate in the deal, according to the person.
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