Dec. 14 (Bloomberg) -- Avaya Inc., the business communications and collaboration provider controlled by TPG Capital and Silver Lake Partners, is seeking to extend its $1.3 billion term loan B-1 to March 2018, according to a person with knowledge of the transaction.
The debt will pay interest at 6.75 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
Lenders who consent to the extension will have the right to be repaid from half the proceeds from any future sale of secured bonds by Avaya, the person said.
The company will pay a 15 basis-point fee to lenders who agree to the amendment, according to the person. A basis point is 0.01 percentage point.
Citigroup Inc. is arranging the deal for the Basking Ridge, New Jersey-based company and investors have until Dec. 17 to let the bank know if they will participate in the deal, the person said.
Avaya was only able to extend $135 million of the B-1 loan in October, according to data compiled by Bloomberg. Lenders were offered a 37.5 basis-point extension and consent fee, Bloomberg data show. The existing term loan due in 2014 pays interest at 2.75 percentage points more than Libor.
TPG Capital and Silver Lake Partners, which acquired Avaya in 2007 for about $7 billion, financed the buyout with $5 billion of borrowings, the data show.
Marijke Shugrue, a spokeswoman for Avaya, declined to comment.
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