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Telecommunications company McLeodUSA Inc. announced last week that it has received a commitment from Chase Manhattan, Citibank, BankAmerica and Goldman Sachs to underwrite a $1 billion secured credit facility that will be used to fund an expansion of the company's personal communications services wireless network.
This is the first time that the company, which usually gets funding from the high yield bond market, has tapped the syndicated loan market.
Chase is acting as the lead arranger, sole book manager and administrative agent on the deal, which comprises a seven-year, $500 million revolver, a seven-year, $300 million delayed draw term loan A, and an eight-year, $200 million term loan B.
Ratings-based pricing on the pro-rata pieces starts at Libor plus 225 basis points, while pricing on the B-term loan starts at Libor plus 300 basis points. The fully underwritten deal will be discussed with lead lenders this week, said one bank familiar with the facility, but a date for the banker meeting has not yet been scheduled. The facility, however, is expected to close next month.
McLeodUSA said proceeds from the proposed bank debt, rated Ba2 by Moody's Investors...