Crown Castle International Said to Set Rate on $1.6 Billion Loan
January 13, 2012, 5:21 AM ESTBy Michael Amato
Jan. 12 (Bloomberg) -- Crown Castle International Corp., the provider of infrastructure for wireless communications, set the interest rate it will pay on a $1.6 billion term loan B it is seeking to refinance debt and fund the acquisition of NextG Networks Inc., according to a person with knowledge of the transaction.
The debt, due in seven years, will pay interest at 3.25 percentage points more than the London interbank offered rate, said the person who declined to be identified because the terms are private. Libor, a rate banks charge to lend to each other, will have a 1 percent floor.
Crown Castle 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.
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.
Bank of America Corp. is arranging the term loan B portion of the financing and lenders must submit commitments by Jan. 20, the person said.
The Houston-based company is also seeking a $1 billion revolving line of credit due in five years and a $500 million delayed-draw term loan A also maturing in five years, according to data compiled by Bloomberg.
The company is proposing to pay 2.5 percentage points more than Libor on both the term loan A and the revolver, with no minimum on the benchmark, the person said. There will be a 50 basis-point fee on the undrawn portion of the term loan A. A basis point is 0.01 percentage point.
Additional Borrowings
Royal Bank of Scotland Plc is arranging both the term loan A and revolver and lenders must submit commitments by Jan. 26, the person said.
Crown Castle can borrow an additional $500 million if total leverage, or debt to earnings before interest, taxes, depreciation and amortization, is five times or less, said the person.
The company is acquiring NextG for $1 billion from a group of investors led by Madison Dearborn Partners LLC, according to a Dec. 16 statement distributed by Globe Newswire. Madison Dearborn, Accel Partners, Redpoint Ventures and Meritech Capital Partners purchased NextG in September 2009, Bloomberg data show.
Jay Brown, chief financial officer of Crown Castle, didn’t respond to an e-mail seeking comment.
A term loan A is sold primarily to banks, while so-called B loans are mainly bought by nonbank lenders such as collateralized loan obligations, mutual funds and hedge funds. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.
--Editors: Faris Khan, John Parry
To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net
To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net
