By Paul A. Harris
Portland, Ore., March 31 – Zayo Group, LLC, a subsidiary of Zayo Group Holdings, Inc., priced an upsized $550 million add-on to its 6 3/8% senior notes due May 15, 2025 (Caa1/B-) at 97.76 to yield 6.707% on Thursday, according to an informed source.
The issue was upsized from $350 million.
The reoffer price came on top of price talk and in line with the earlier guidance of 97.75.
There was a significant amount of reverse inquiry in the deal, a trader said.
Morgan Stanley & Co. LLC was the bookrunner.
Zayo, a Boulder, Colo.-based provider of bandwidth infrastructure services, plans to use the proceeds to fund the redemption of its 10 1/8% senior notes due 2020. The additional proceeds resulting from the upsizing of the deal will be used to repay term loan debt.
| Issuers: | Zayo Group, LLC and Zayo Capital, Inc.
|
| Face amount: | $550 million
|
| Proceeds: | $537.68 million
|
| Maturity: | May 15, 2025
|
| Security description: | Add-on to 6 3/8% senior notes due May 15, 2025
|
| Bookrunner: | Morgan Stanley & Co. LLC
|
| Coupon: | 6 3/8%
|
| Price: | 97.76
|
| Yield to maturity: | 6.707%
|
| Spread: | 492 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until May 15, 2020, then callable at 103.188
|
| Equity clawback: | 40% equity clawback at 106.375 until May 15, 2018
|
| Trade date: | March 31
|
| Settlement date: | April 14 with accrued interest
|
| Ratings: | Moody’s: Caa1
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 97.76
|
| Marketing: | Quick to market
|
| Original issue: | $350 million priced at par on May 1, 2015
|
| Fungibility: | Upon registration the add-on notes will become fungible with the original notes
|
| Total issue size: | $900 million
|
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