Go Daddy Group Inc., the website registration and hosting company KKR & Co., Silver Lake Partners and Technology Crossover Ventures took private in 2011, lowered the rate it will pay on a $740.6 million covenant-lite loan, according to a person with knowledge of the transaction.
The interest on the debt, due in 2018, will be reduced to 3.25 percentage points more than the London interbank offered rate and will be sold at par, 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 one percent floor.
Lenders are being offered six months of soft-call protection of 101 cents, meaning the company would have to pay one cent more than face value to refinance the debt during the first six months.
Leverage, or debt to earnings before interest, taxes, depreciation and amortization, will be 3.9 times on a senior secured basis and 5.9 times total, the person said. The debt is rated Ba3 by Moody’s Investors Service and B by Standard & Poor’s.
Barclays Plc, Deutsche Bank AG, Royal Bank of Canada, Goldman Sachs Group Inc. and KKR Capital Markets are arranging the transaction and commitments are due Jan. 31 by 5 p.m. in New York, according to the person.
The company’s existing term loan pays interest at 4.25 percentage points more than the London interbank offered rate with a 1.25 percent floor, according to data compiled by Bloomberg. The debt was sold to investors at par and was quoted at 101.88 cents on the dollar today, the data show.
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