KCA Deutag Said to Seek $400 Million Term Loan for Refinancing

KCA Deutag Drilling Ltd, a provider of oilfield services, is seeking a $400 million term loan to refinance debt, according to a person with knowledge of the matter.

The six-year credit may pay interest at 5.75 percentage points to 6 percentage points more than the London interbank offered rate with a 1.25 percent minimum on the lending benchmark, said the person, who asked not to be identified because the terms are private.

KCA, owned by a consortium led by Pamplona Capital Management and several former mezzanine debt holders, may sell the loan at 99 cents on the dollar, the person said.

Lenders are offered 102, 101 soft-call protection, meaning that Aberdeen, U.K.-based KCA would have to pay two cents more than face value in the first year and one cent more than par in the second year to reprice the debt, the person said.

JPMorgan Chase & Co. is leading the financing, and lenders must let the bank know by March 27 if they will participate in the deal, the person said.

Standard & Poor’s assigned a B grade to the debt while Moody’s Investors Service rated the loan B3.

The company is selling $860 million of seven-year bonds as part of its refinancing transaction, according to data compiled by Bloomberg.

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