Bloomberg News

TowerCo LLC Sets Lower Interest Rate on $397 Million Term Loan

March 13, 2012

TowerCo LLC, the telecommunications company backed by Microsoft Corp. co-founder Paul Allen’s investment firm, set a lower interest rate on its $397 million term loan, according to a person with knowledge of the transaction.

The debt due 2017 will pay 3.5 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 say they can borrow in dollars from each other, will have a 1 percent floor.

Morgan Stanley is arranging the loan for the Cary, North Carolina-based company and lenders must submit commitments by March 20, the person said.

The loan was originally priced February 2011 at 3.75 percentage points more than Libor, with a 1.5 percent floor, according to data compiled by Bloomberg. The debt was sold to investors at 99.5 cents on the dollar.

Lenders on the repricing will be offered one-year call protection of 101 cents, the person said, meaning the company would have to pay 1 cent more than face value to refinance the debt during its first year.

TowerCo was founded in 2004 by its Chief Executive Officer Richard Byrne and Chief Operating Officer Scot Lloyd, with backing from New York-based private-equity firm Tailwind Capital Group LLC, according to the tower operator’s website.

Soros Strategic Partners LP, controlled by billionaire investor George Soros, became an investor in the company in December 2005. In September 2008, TowerCo received equity investments from Vulcan Capital, the Seattle firm formed by Allen, and New York private-equity firm Altpoint Capital Partners, according to the website.

Dan Hunt, chief financial officer of TowerCo, declined to comment.

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

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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