R.H. Donnelley's $850 million "B" piece has been oversubscribed and is set to close this week, said a banker familiar with the credit. The remainder of the $1.55 billion loan package is expected to close early next week with the final terms set to be completed after the holiday, he added. Lead banks Deutsche Bank, Bear Stearns, and Salomon Smith Barney priced the "B" tranche at LIBOR plus 4%, while the spread on the $125 million revolver and $575 million "A" loan is LIBOR plus 3 1/2%. The deal also includes pre-payment penalties. Bankers on the deal either declined to comment or did not return calls.
Concurrently, Bell Actimedia's C$1.64 billion directories deal was en route to closing within a week, according to another banker familiar with the situation. He added that a $100 million dollar Canadian denominated "B" piece has been carved out and is priced at LIBOR plus 4%. The C$1.1 billion "B" piece is now a "C" loan and pricing is flexed up from LIBOR plus 4% to LIBOR plus 4 1/4%. The "C" also carries a 1% original issue discount and there is a 101 call protection feature. The Credit Suisse First Boston, Scotia Capital, and CIBC World Markets-led credit further includes a C$400 million "A" loan and a C$100 million revolver. Actimedia is being acquired by Kohlberg Kravis Roberts & Co. and the Teacher's Merchant Bank from Bell Canada for C$3 billion. Bankers on this deal declined to comment or did not return calls.
The Donnelley credit backs its $2.23 billion purchase of Sprint's directory publishing business. The acquisition is also being financed with proceeds from an offering of $300 million in senior notes and a $450 million issuance of senior subordinated notes. The bonds were oversubscribed with terms being set by the end of this week on the $300 million of eight-year senior notes, non-callable for four years, with a 9-9 1/4% yield. The $450 million in 10-year subordinated notes at a 11-11 1/4% yield are noncallable for five years. Goldman Sachs Capital Partners is also contributing toward the transaction by purchasing $200 million of Donnelley's cumulative convertible preferred stock. Calls to Donnelley and Actimedia were not returned.