Endurance International Group Inc., the web hosting and online service provider acquired by Warburg Pincus LLC and GS Capital Partners last year, is seeking a $535 million term loan to refinance debt and fund future acquisitions, according to a person with knowledge of the transaction.
The six-year debt will pay interest at 6.25 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 say they can borrow in dollars from each other, will have a floor of 1.5 percent.
Endurance 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.
Credit Suisse Group AG is arranging the deal for the Burlington, Massachusetts-based company and will host a lender meeting April 2 at 2 p.m. in New York, the person said.
The company’s existing $350 million buyout loan pays interest at 6.25 percentage points more than Libor with a 1.5 percent floor, according to data compiled by Bloomberg. The debt was sold to investors at 98 cents on the dollar.
Jeffrey Smith, a spokesman for Warburg Pincus, declined to comment.
In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan it can’t.
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