NCO Group withdraws $870 million credit facility from market

By Sara Rosenberg

New York, Dec. 14 - NCO Group Inc. pulled its $870 million credit facility (B1/B) from the market and cancelled its proposed $300 million bond offering due to unattractive rates available, according to a market source.

The credit facility consisted of a $120 million revolver and a $750 million term loan, both talked at Libor plus 625 basis points.

The revolver had no Libor floor and the term loan had a 1.25% Libor floor, according to the source.

In addition, the term loan was offered at an original issue discount of 96 to 97 and included 101 soft call protection for one year.

Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and RBS Securities Inc. were the lead banks on the deal.

Proceeds were to be used to back the already-completed roughly $470 million acquisition of APAC Customer Services Inc. by One Equity Partners and pending merger with One Equity's portfolio company, NCO Group. Proceeds were also planned to refinance existing debt at both companies.

"The company, APAC Customer Services and One Equity Partners continue to believe it is in the best interests of the company and APAC to seek to combine their businesses and to that end they are continuing to look at alternatives that would enable the combination to be completed on terms that are advantageous to their respective stakeholders," an NCO press release said.

Because the financing and merger are not being completed at this time, NCO said it terminated cash tender offers for its $200 million 11 7/8% senior subordinated notes due 2014 and its $165 million floating-rate senior notes due 2013.

The proposed combined company was expected to be renamed Expert Global Solutions Inc.

NCO is a Horsham, Pa.-based provider of business process outsourcing services. APAC is a Bannockburn, Ill.-based provider of customer care services.

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