InfoNXX has come back to tap JPMorgan and Bank of America for a $600 million senior secured credit facility. The company originally intended to go to market in July with B of A and Lehman Brothers, but backed out before it got to syndication, according to market sources. A company spokeswoman commented that the deal in July was only a potential option the company was looking at and, along with bad timing, the company decided against the credit while determining which avenues it wanted to pursue.
The new deal, launched last week, consists of a four-year, $200 million revolver; a six-year, $275 million term loan "B" and a seven-year, $125 million second-lien term loan. The credit will be used to repay $215.1 million of existing debt and pay a $300 million dividend to private equity firm Investcorp. Pricing could not be determined by press time.
While one investor just laughed at the mention of the deal, another portfolio manager commented, "We already shot that one in the head," citing the deal that never happened as a turnoff. "The company's not cash-flow positive and they are taking out a dividend," he said. The new deal is $200 million larger than what was originally set for syndication in July. That deal would have consisted of a five-year, $100 million revolver and a seven-year, $300 million term loan, according to a banker. Pricing was set to be LIBOR plus 4% for both tranches. Hazem Ben-Gacem, managing director at Investcorp, declined comment.
The company also just recently tapped B of A for a facility in April. The existing $300 million deal consists of a five-year, $200 million revolver and a five-year, $100 million term loan "A" both priced at LIBOR plus 2 1/2%. Robert Pines, ceo, and other executives were out of the office and could not be reached. Calls to InfoNXX spokesmen were not returned.
One investor said he thought it was "too leveraged." The combination of minimal cash flow and lots of acquisitions wasn't a draw for them, he said. Moody's Investors Service estimated pro forma debt leverage to be around 4.8 times. The ratings agency assigned the first lien tranches a B1 and the second lien Caa1 citing significant leverage subsequent to the proposed recapitalization.
Bethlehem, Pa.-based InfoNXX is a provider of telephone directory assistance in the United States, United Kingdom, Philippines, France, and Italy, processing over one billion requests a year.