Citigroup is leading a $450 million facility for GXS Corp. It consists of a five-year, $50 million revolver; a six-year, $300 million "B" term loan; and a six-and-a-half year, $100 million second-lien term loan. Pricing is LIBOR plus 3 1/4% on the revolver and "B" and talk on the second lien is LIBOR plus 6 1/2%. The loan will refinance existing debt and provide long-term financing to complete the purchase of IBM's EDI assets purchased by Francisco Partners, the majority shareholder of GXS for $135 million. Francisco Partners is a technology-focused investment firm.
GXS operates secure global network services. In January it acquired the parent company of G International from Francisco. G International owns the Electronic Data Interchange (EDI) and Business Exchange Services (BES) businesses that had been owned by IBM Corp.
Moody's Investors Service assigned a B2 rating to the revolver and term loan and a Caa1 rating to the second lien. It cited the high leverage with pro forma debt to EBITDA for the debt-financed acquisition of G International of 3.8 times. The ratings are supported by GXS's position in EDI, which management estimates is greater than 40% of the market. A call to Francisco Partners was not returned by press time.