Global eXchange Services (GXS) recently completed $205 million in new debt financing to take out a $210 million bridge financing that Credit Suisse First Boston provided to the company last September. "[The new financing] gives us a permanent capital structure that allows us to focus on the business," noted Michael Salvati, recently appointed cfo of GXS. The bridge loan was set to expire this September. "We were looking to make sure that we didn't come down to the wire," he added. Last year after finding the loan market unreceptive, CSFB pulled a $210 million credit backing Francisco Partners' acquisition of GXS and funded the deal itself (LMW, 10/02).
The new financing, led by CSFB, includes a $30 million revolver, a $70 million "B" term loan and a $105 million floating-rate note issue. The revolver is priced at LIBOR plus 41/4% and the term loan "B" carries a spread of 6% over LIBOR. Both tranches of the credit facility mature in 2007 while the floating-rate note matures in 2008. The floating-rate note is priced at LIBOR plus 9%.
The new financing is more attractive over the long-term than letting the bridge-loan convert to a term loan, noted Salvati. In addition, the floating-rate notes have fewer covenants than a traditional bank debt deal, he added. Investors in the new deal are primarily institutional lenders. GXS is a business to business e-commerce network operator headquartered in Gaithersburg, Md.