Windstream Corp. (WIN:US) increased the size of a loan it’s seeking to refinance debt to as much as $1.345 billion from $300 million, according to a person with knowledge of the transaction.
The seven-year debt will pay interest at 2.75 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 75 basis point floor. A basis point is 0.01 percentage point.
The loan is expected to now be sold at 99.75 cents on the dollar to par, compared with 99.5 cents previously proposed, the person said. The decrease in the discount increases proceeds for the company and reduces 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, said the person.
Proceeds from the new B-4 piece will be used to repay the company’s B-2 term loans due 2015 as well as its A-2 and B-1 term loans both due in 2013, according to the person. The debt is rated Baa3 by Moody’s Investors Service and BB+ by Standard & Poor’s.
Bank of America Corp. is arranging the financing for the Little Rock, Arkansas-based telecommunications services- provider, according to data compiled by Bloomberg. Commitments are due by 2 p.m. tomorrow in New York, the person said.
Windstream also sold yesterday $700 million of 6.375 percent bonds due in 2023 to fund a $650 million tender offer for its 8.875 percent notes maturing in 2017, Bloomberg data show.
David Avery, a spokesman for Windstream, didn’t immediately respond to an e-mail seeking comment.
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