First Data Corp., the world’s largest payment processor, is seeking to reduce the rate on a $2.49 billion term loan, according to a person with knowledge of the transaction.
The KKR & Co.-controlled company is proposing to lower the interest rate on the debt due in March 2017 to 3.25 percentage points to 3.5 percentage points more than the London interbank offered rate from 4 percentage points more than Libor, said the person, who asked not to be identified without authorization to speak publicly.
First Data, based in Atlanta, is trying to manage more than $22 billion of debt it mostly incurred from KKR’s 2007 leveraged buyout of the company, two months before the start of the worst recession since the Great Depression. Credit Suisse Group AG is arranging the transaction and seeks commitments from lenders at 4 p.m. in New York on Jan. 23, the person said.
The company also is looking to extend the duration of a $183 million portion denominated in euros to March 2021, from March 2017, the person said. That loan pays interest at 4 percentage points more than Libor. Neither loan has a minimum on the lending benchmark.
Lenders who choose not to reprice or extend their loans may be repaid at 100 cents on the dollar, the person said.
The company has a B3 rating from Moody’s Investors Services, six levels below investment grade and a level associated with companies that offer “poor financial security.” Standard & Poor’s grades the company one notch higher, at B.
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