Bloomberg News

RailAmerica’s $585 Million Term Loan Rises in Initial Trading

February 24, 2012

Feb. 23 (Bloomberg) -- RailAmerica Inc.’s $585 million term loan to refinance its 9.25 percent first-lien notes due 2017 rose in initial trading, according to data provider Markit Group Ltd.

The seven-year debt began trading at par, according to Markit. The financing for the operator of short-line and regional railroads was sold to investors at 99.5 cents, according to data compiled by Bloomberg.

Morgan Stanley arranged the deal for the Jacksonville, Florida-based company, the data show. Fortress Investment Group LLC acquired RailAmerica in February 2007, according to a Feb. 15 Standard & Poor’s report. The company was taken public in October 2009 and Fortress currently owns 59.2 percent of the outstanding shares, Bloomberg data show.

The loan pays interest at 3 percentage points more than the London interbank offered rate, with a 1 percent minimum on the benchmark, the data show. Libor, the rate at which banks say they can borrow in dollars from each other, serves as a reference for about $360 trillion of financial instruments worldwide.

The debt is rated B1 by Moody’s Investors Service and graded BB+ by S&P, the person said.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

--Editors: Faris Khan, Chapin Wright

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


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