A richly priced $975 million facility that will be used to finance the acquisition of UK-based Inmarsat Ventures by Grapeclose Limited , a company formed by private equity firms Apax Partners and Permira , is expected to be heartily received by the market. "This is a transaction that will fly," a trader said. "It's going to trade well above par in the secondary market." Traders commented on the attractive price, with one player saying there are big tickets coming in.
Credit Suisse First Boston , The Royal Bank of Scotland and Barclays are leading the debt, that includes a seven-year, $200 million "B" piece priced at LIBOR plus 3%, and an eight-year, $200 million "C" priced at LIBOR plus 3 1/ 2%. The credit is rated BB-/Ba3. Late last month, the average spread for a credit of this rating was 246 basis points over LIBOR.
One European trader said he would love to trade it if he could get his hands on it, but the deal is being syndicated in the U.S. Most European loan investors will not be able to invest in the credit, but European banks may look to get in on a deal like this, European loan traders said. One U.S. buysider said he is probably not going to have much interest in the deal though because of the European domicile.
The facility includes a $75 million revolver, a $100 million capex facility and a $400 million "A" loan, all of which is priced at LIBOR plus 2 1Ž 2% and matures in 2009. The company's total debt to EBITDA is 3.9 times, while senior debt to EBITDA is 2.7 times. Inmarsat is a holding company for firms that provide satellite communications services. Calls to Apax and Permira were not returned by press time.