Integra Telecom Holdings Inc., a Portland, Oregon-based telephone and internet provider, set the rate it will pay on $780 million of loans it’s seeking to refinance debt, according to a person with knowledge of the transaction.
A $555 million six-year first-lien term portion will pay interest at 5.25 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 1.25 percent floor.
Integra Telecom 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.
A $225 million, second-lien term piece maturing in seven years will pay interest at 9 percentage points to 9.5 percentage points more than Libor, with a 1.25 percent floor, and is expected to be sold at 98 cents to 98.5 cents, according to the person.
Second-lien creditors will not be able to refinance debt during the first year, then can do so at 102 cents in the second year and 101 cents in the third year, the person said.
Bank of America Corp. is arranging the first-lien piece while Morgan Stanley is placing the second-lien portion and commitments are due Feb. 15, according to the person.
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