GE Capital is providing Transaction Network Services with a new $230 million credit facility to partially fund the repurchase of nine million shares via a modified Dutch auction. Up to $170 million of the loan will be used for the repurchase, buying back 32% of the outstanding shares.
The loan for the TNS subsidiary will also replace a $95 million GE Capital-led facility put in place last year. A bank meeting is scheduled for Wednesday and the loan is expected to close sometime in May. The new credit facility for the provider of data communication services consists of a five-year, $30 million revolver and a seven-year, $200 million term loan "B." GE had committed $240 million but TNS will only need $230 million, said a lender. Pricing could not be determined.
The move will increase debt from $51 million to between $165 million and $220 million pro forma, according to Moody's Investors Service, which has put the Ba3 bank loan rating on review for downgrade.
In March 2001, GTCR Golder Rauner along with a team of executives including founder John McDonnell, bought the Transaction Solutions subsidiary of PSINet for $285 million. Lehman Brothers led the financing for the buyout and is the financial advisor and dealer manager on the share repurchase. Calls to Henry Graham, executive v.p., cfo and treasurer, were not returned.