Investors filled the $660 million credit for integrated communications provider NTELOS following a bank meeting last Tuesday at the New York Palace Hotel. The deal, being led byMorgan Stanley and Bear Stearns, backs the acquisition of the company by Quadrangle Capital Partners and Citigroup Venture Capital (CVC).
The credit comprises a $35 million revolver and $400 million first-lien term loan, both being offered at LIBOR plus 2 3/4%. The banks are also pitching a $225 million second-lien term loan that went out to investors at LIBOR plus 5 1/2%. "Both tranches are oversubscribed at this point. The banks are asking for commitments this Friday," said one loan banker, adding that no pricing or structural changes are yet officially on the table.
The company previously had a $325 million credit that was put into place in 2000, according to Wesley Wampler, director, investor relations at NTELOS. Some of this debt is being refinanced, but the latest loan is primarily new money. Wachovia Securities was the lead on the previous debt, though it had been First Union before the merger, he noted. Wampler said the choice of new lead banks was a board decision and declined further comment.
As part of the two private-equity firms' acquisition, NTELOS is offering to repurchase up to 76% of its existing equity. Once the refinancing and tender offer is complete, Quadrangle and CVC will purchase up to 24.9% of the post-recap equity of the company. Quadrangle and CVC will then acquire the remainder of the company's equity in a merger transaction. NTELOS, which became a private company after emerging from bankruptcy protection in 2003, has stated that its two largest shareholders are Morgan Stanley and affiliates of Capital Research and Management Co. Bankers from the lead banks declined comment.