Web.com Group Inc. is seeking to increase a loan it obtained in 2011 to support the acquisition of Network Solutions Inc. and lower the interest rate on the debt.
The web-hosting company is looking to boost the first-lien portion to $660 million, from about $628 million outstanding as of Dec. 31, it said today in a statement distributed by Globe Newswire. Proceeds will be used to repay the $32 million remaining under a second-lien slice.
Web.com, based in Jacksonville, Florida, is seeking to lower the interest rate on the debt from 4.25 percentage points more than the London interbank offered rate, with a 1.25 percent minimum, according to the statement.
The company may also increase its revolving credit line, which pays interest at 3.75 percentage points more than Libor, by $10 million, the company said.
JPMorgan Chase & Co. is leading the transaction and will host a lender call tomorrow at 10:30 a.m. in New York, according to the statement.
First-lien debt is repaid first in a bankruptcy or liquidation, second-lien debt is repaid next.
In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.