Investors oversubscribed to the $80 million add-on incremental "B" term loan for Language Line, which was increased from its originally proposed size of $75 million. Pricing was reverse flexed from LIBOR plus 4% to LIBOR plus 33/4%, a banker explained. The "B" loan, led by TD Securities, FleetBoston Financial and Wachovia Securities, will provide a dividend to the company's sponsor, Providence Equity Partners, he noted. The five-and-a-half-year loan will tack on to Language Line's existing $200 million credit put in place in October 2001. This credit has amortized down to $170 million. The banker said the add-on loan is being executed now because the performance of Language Line, a provider of over-the-phone translation services, has been very strong and it has de-levered back down to its 2001 levels. "It just made sense to recapitalize," he added.
The initial credit includes a $160 million term loan and a $40 million revolver priced at LIBOR plus 31/4%. Monterey, Calif.-based Language Line instituted this deal to replace higher-cost debt and to pay a previous dividend to Providence Equity (LMW, 11/01).
Language Line was originally founded as Communication and Language Line (CALL) in 1984. It was acquired by AT&T in 1989 and renamed AT&T Language Line Services. Providence Equity acquired the company in 1999. Mark Pelson, a managing director from Providence Equity and a director of Language Line, referred calls to a banker familiar with the deal, but Fleet bankers did not return calls, while TD and Wachovia officials declined to comment.