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Airvana Seeks $420 Million Term Loan for Private-Equity Payout—Bloomberg BusinessWeek

March 2 (Bloomberg) -- Airvana Inc., the telecommunications equipment manufacturer, is seeking a $420 million term loan to refinance debt and pay a dividend to its private-equity owners, according to data compiled by Bloomberg.

The company will offer an interest rate 7 percentage points to 7.25 percentage points more than the London interbank offered rate, Bloomberg data show. Libor, the rate banks charge to lend to each other, will have a 1.5 percent floor.

Airvana will also propose to issue the debt at 99 cents on the dollar, according to Bloomberg data, reducing proceeds for the Chelmsford, Massachusetts-based company and boosting the yield for investors.

Societe Generale SA and Macquarie Group Ltd. are arranging the four-year loan and will host a lender meeting March 4, Bloomberg data show.

David Gamache, chief financial officer of Airvana, didn’t return a telephone message left at his office seeking comment.

Lenders will also be offered a one-year soft-call protection of 101 cents, Bloomberg data show, meaning the company would have to pay 1 cent more than face value to refinance the debt during its first year.

The company, taken private by Blackstone Group LP, SAC Capital Partners, Sankaty Advisors LLC and ZelnickMedia Corp. for $344.6 million in April 2010, is issuing its second loan in seven months to fund a payout, Bloomberg data show.

Airvana raised a $360 million term loan in August, with a spread of 9 percentage points more than Libor and a 2 percent floor on the lending benchmark, according to Bloomberg data. The company issued the four-year debt at 98 cents on the dollar.