Zayo Group Said to Lower Rate on $1.84 Billion Loan to RefinanceMichael Amato
Zayo Group LLC, the provider of bandwidth infrastructure services, lowered the rate it will pay on $1.84 billion of loans, according to a person with knowledge of the transaction.
A $1.612 billion term loan B due in July 2019, will now pay interest at 3.25 percentage points more than the London interbank offered rate and the loan will be sold at par, said the person, who asked not 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 percent floor.
Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, the person said.
Zayo Group also reduced the rate it will pay on a $225 revolving line of credit due in July 2017, the person said. The revolver will now pay interest at 3 percentage points more than Libor with no minimum on the lending benchmark, according to the person.
The company is also seeking an amendment to remove the maximum senior secured and total leverage covenant from the deal while leaving the fixed charge covenant ratio covenant in place, the person said.
Morgan Stanley, Barclays and Royal Bank of Canada are arranging the transaction and commitments are due Feb. 19, according to the person.
The company’s existing term loan B pays interest at 4 percentage points more than the London interbank offered rate while its $225 million revolving line of credit pays 3.5 percentage points more than Libor, according to data compiled by Bloomberg. Both loans contain a 1.25 percent floor and the term loan was quoted at 101.5 cents on the dollar today, the data show.