J.P. Morgan and Morgan Stanley launched syndication last Tuesday of an amended and increased facility for wireless communications company Crown Castle International Corp. The new $1.2 billion credit includes increased pricing and a longer maturity on the "B" loan, confirmed Jay Brown, v.p. of finance. The "B" tranche is furthermore being increased from $399 million to $1 billion, with pricing increased from LIBOR plus 23/4% to LIBOR plus 31/4%. Maturity on the institutional piece will be extended from March 2008 to September 2010.
The credit's unfunded $500 million revolver will be decreased to $350 million and pro rata pricing will range from LIBOR plus 2-21/2%, tied to a leverage-based grid, Brown explained. Current pricing on the pro rata would be at LIBOR plus 21/2%, as multiples are over four times, a J.P. Morgan banker explained in a conference call for the deal. There is also a $296 million "A" loan in the existing facility that will remain in place. Brown said the company expects existing pro rata lenders to roll into the new deal.
Also addressed in the amended deal is the issue of Crown Castle's U.K. subsidiary, which will be designated as a restricted group subsidiary. "The U.K. [subsidiary] is underlevered," Brown explained. Proceeds from the refinanced deal will go toward repaying the $99.2 million balance (outstanding since June) of the U.K. subsidiary's credit facility. The company will also give notice to redeem its U.K. 9% guaranteed bonds due 2007. These bonds had $206.6 million outstanding since last June. Higher priced senior notes will also be paid down with $300 million from the new "B" loan.
Morgan Stanley is new to the credit, Brown noted, explaining that the firm has done a lot of non-loan work with the company. "This is a terrific deal for us to extend maturities and reduce our interest expense," Brown said. A Morgan Stanley banker did not return calls.