US fibre infrastructure provider Zayo is to fund its US$2.3bn purchase of US broadband connectivity company AboveNet predominantly through debt financing, according to an SEC filing.
Morgan Stanley and Barclays Bank are providing Zayo with a…
US fibre infrastructure provider Zayo is to fund its US$2.3bn purchase of US broadband connectivity company AboveNet predominantly through debt financing, according to an SEC filing.
Morgan Stanley and Barclays Bank are providing Zayo with a US$1.5bn senior secured term loan facility and a US$250m senior secured revolving credit facility.
In addition the banks are underwriting two bridge facilities: US$750m in senior secured notes and US$500m in senior unsecured notes.
Zayo has also received an additional US$180m in equity commitments from existing and new investors, an undisclosed amount of which will go towards the acquisition.
Moody’s has assigned the credit facilities and secured notes B1 ratings, while the unsecured notes were rated Caa1.
AboveNet’s lead financial adviser on the takeover by Zayo is JP Morgan, while Moelis & Company is acting as co-adviser.
Wiggin and Dana is serving as AboveNet’s legal adviser. Wilkie Farr & Gallagher is advising the company’s board.
Zayo’s legal adviser is Gibson Dunn & Crutcher.
The deal is expected to close in the coming months.
The remainder of the debt taken on will be used to repay or refinance Zayo’s and Abovenet’s existing debts.
As part of the repayment, Zayo has announced a buyback for any and all of its US$350m outstanding 10.25% senior secured first-priority notes due 2017.
Bondholders who take up the offer, which expires on 29 June, will be receive the total consideration offered in the tender offer equalling US$1,112.74 per US$1,000 principal amount of notes.
Morgan Stanley is acting as the dealer manager and solicitation agent, and D.F. King & Co is to serve as the tender agent and information agent.
Meanwhile, Zayo has also completed the purchase of US dark fiber provider FiberGate for US$117m. The acquisition is being funded with cash and is expected to close in the autumn. Waller Capital Partners is the sole financial advisor to Fibergate.
