Datapipe shifts funds between incremental first- and second-lien loans

By Sara Rosenberg

New York, Aug. 4 – Datapipe Inc. upsized its incremental first-lien term loan (B1/B) to $95 million from $90 million and downsized its incremental second-lien term loan (Caa2/CCC+) to $20 million from $25 million, according to a market source.

Pricing on the incremental first-lien term loan is still Libor plus 475 basis points with a 1% Libor floor and an original issue discount of 99, and pricing on the incremental second-lien term loan is still Libor plus 800 bps with a 1% Libor floor and a discount of 98.5.

The first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

Covenants include maximum total leverage and fixed charge coverage ratios.

The company’s $120 million in incremental bank debt also includes a $5 million incremental revolver (B1/B).

Jefferies Finance LLC is the lead on the deal.

Proceeds will be used to fund an acquisition.

In June, the company received lender approval of an amendment to its existing credit facility to allow for the acquisition and, as part of the amendment, pricing on the existing first-lien term loan was lifted to Libor plus 475 bps with a 1% Libor floor from Libor plus 425 bps with a 1% Libor floor, and pricing on the existing second-lien term loan was increased to Libor plus 800 bps with a 1% Libor floor from Libor plus 750 bps with a 1% Libor floor.

Datapipe is a Jersey City, N.J.-based managed hosting and cloud services provider.

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