DigitalGlobe Inc. (DGI:US), a provider of high-resolution satellite imagery, cut the rate it will pay on a $550 million term loan B it’s seeking to back its acquisition of GeoEye Inc. (GEOY:US), according to a person with knowledge of the transaction.
The seven-year debt, will now pay interest at 2.75 percentage points more than the London interbank offered rate, down from a range of 3.25 percentage points to 3.5 percentage points, said the person, who asked not to be identified because the information is private. The Libor floor will remain unchanged at 1 percent.
The rate will step down to 2.5 percentage points more than Libor when total leverage is less than 2.5 times, the person said.
DigitalGlobe is proposing to sell the loan at par, compared with 99.5 cents initially proposed, the person said, increasing proceeds for the company and reducing 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.
Morgan Stanley, JPMorgan Chase & Co., Bank of Tokyo- Mitsubishi UFJ and Citigroup Inc. are arranging the financing, which also includes a $150 million, five-year revolving line of credit, according to data compiled by Bloomberg. Investors have until 5 p.m. today in New York to let the banks know whether they will participate in the deal, according to the person.
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