TNS Inc., a maker of networking products, cut the rate it will pay on $640 million of covenant-light loans backing its buyout by Siris Capital Group, according to a person with knowledge of the transaction.
A $540 million first-lien term portion will pay interest at 4 percentage points more than the London interbank offered rate, down from 4.25 percentage points, said the person, who asked not to be identified because the information is private.
TNS is proposing to sell the loan at 99 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
A $100 million second-lien term piece will pay interest at 8 percentage points more than Libor, compared with 8.25 percentage points initially proposed, said the person. The debt will be sold at 98.5 cents, compared with 98 cents earlier proposed, the person said.
The Libor floor on both the first and second lien term portions was also reduced to 1 percent from 1.25 percent, said the person.
SunTrust Banks Inc. and Macquarie Group Ltd. are arranging the financing and commitments are due by 4 p.m. today in New York, the person said. The debt is rated B1 by Moody’s Investors Service and BB- by Standard & Poor’s.