FairPoint Communications Seeks $725 Million in Refinancing Loans

FairPoint Communications Inc. (FRP), a telephone-service provider that emerged from bankruptcy in 2011, is seeking a $725 million loan to repay debt under an existing credit pact.

The new bank financing would include a $650 million term portion and a $75 million revolving line of credit, the Charlotte, North Carolina-based company said in a statement today.

The debt is being arranged by Morgan Stanley, Credit Suisse Group AG and Jefferies Group Inc., according to a person with a knowledge of the matter. The banks are meeting with other lenders to discuss the deal tomorrow, said the person, who asked not to be identified because the deal is private.

FairPoint’s existing loan has about $955 million outstanding, according to the company. The debt was arranged in 2011 and paid interest at 4.5 percentage points more than the London interbank offered rate with a 2 percent floor on the lending benchmark, according to data compiled by Bloomberg.

As part of the refinancing, FairPoint also is seeking $300 million of senior secured notes, the company said.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

To contact the reporter on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.

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