Patagonia bridge loan funds as dealers, seeking to offload $1.3 billion of debt, deepen discounts

By Paul A. Harris

Portland, Ore., Aug. 2 – With the bridge loan supporting Stonepeak’s $2.7 billion acquisition of Lumen Technologies' Latin American operations now having funded, dealers are keen to syndicate $1.3 billion of Patagonia Holdco LLC debt backing the deal and are steepening discounts, according to market sources.

Lumen announced the closing of the acquisition in a Monday press release.

The OID on an $800 million term loan swooped to 82 from 90, with commitments due at noon ET on Wednesday.

And although official talk on the $500 million offering of seven-year non-call three-year senior secured first-lien notes (B1/B+) was pending at press time, the market anticipates a 7˝% coupon with an OID in the low 80s, down from earlier price guidance in the 86 area, sources said on Tuesday.

Although the deal has an emerging markets cache, there are high-yield investors paying attention, a source said.

The Rule 144A and Regulation S for life notes offering ran a roadshow last week and is in the market via joint bookrunners JPMorgan, Goldman Sachs, Citigroup, BofA, Natixis, Deutsche Bank and Scotia.

The surviving entity is called Cirion, according to the Monday press release, which added that Stonepeak has named Lumen's LatAm regional president Facundo Castro as Cirion's new CEO and is retaining the current executive team and existing employees.

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