Citigroup, JPMorgan and The Royal Bank of Scotland are leading a $1.3 billion interim credit facility for Nortel Networks. The Ontario, Canada-based telecommunications company plans to use the loans to repay its $1.275 billion of notes that mature on Feb. 15. The deal breaks down into a one-year, $850 million senior secured tranche "A" and a one-year senior unsecured tranche "B." Pricing on the deal could not be determined. It hit the market last Wednesday.
Moody's Investors Service has assigned a B2 rating to the "A" tranche and a B3 rating to the "B" tranche. Nortel is placing virtually all of its U.S. and Canadian assets up as collateral for this transaction, according to an analyst at the ratings agency. Moody's has also upgraded the rating of Nortel's $200 million senior notes due 2023 to B2.
Nortel is a worldwide telecommunications company with customers in more than 150 countries. It specializes in optical, wireless and voice technologies and solutions. Calls to RBS, JPMorgan and Citigroup were not returned. A spokesman at Nortel declined comment.