Rackspace revises $800 million add-on term loan B OID to 99.75

By Sara Rosenberg

New York, Nov. 10 – Rackspace Hosting Inc. tightened the original issue discount on its $800 million senior secured add-on covenant-light term loan B (Ba3/BB-/BB+) due Nov. 3, 2023 to 99.75 from talk in the range of 99.25 to 99.5, according to a market source.

Also, the company added 101 soft call protection for six months to the add-on loan as well as to the existing term loan B, the source said.

Like the existing term loan B, pricing on the add-on loan is Libor plus 300 basis points with a 1% Libor floor.

Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Barclays, RBC Capital Markets, Credit Suisse Securities (USA) LLC, BMO Capital Markets and Apollo are the joint lead arrangers on the deal. Citigroup is the administrative agent.

Recommitments were scheduled to be due at 1 p.m. ET on Friday, the source added.

Proceeds will be used to fund the acquisition of Datapipe.

With the transaction, the majority owner of Datapipe, Abry Partners, will receive equity in Rackspace.

Closing is expected on Nov. 15.

Rackspace, owned by Apollo Global Management LLC and co-investors, is a San Antonio-based multi-cloud managed services company. Datapipe is a Jersey City, N.J.-based provider of managed services across public and private clouds, managed hosting and colocation.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.