Archway Marketing Services Inc., a provider of outsourced marketing logistics and fulfillment services, set the interest rate on $175 million of loans to back the company’s buyout by Investcorp, according to a person with knowledge of the transaction.
GE Capital Markets the lending unit of General Electric Co. and ING Bank are arranging the financing for the Rogers, Minnesota-based company which consists of a $110 million term loan, a $35 million delayed-draw term portion and a $30 million revolving line of credit, according to data compiled by Bloomberg.
All three pieces will pay interest at 5.25 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 1.25 percent floor.
Archway Marketing is proposing to sell the debt at 99 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
An e-mail sent to Investcorp seeking comment was not immediately returned.
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