Dell adds €500 million term loan B, talks it at Libor plus 400 bps

By Paul A. Harris

Portland, Ore., Sept. 19 - Dell Inc. added a €500 million minimum term loan B to its acquisition financing on Thursday, market sources said.

The Libor spread is talked at 400 basis points, 25 bps behind the spread of the previously announced dollar-denominated term loan B. Like the dollar tranche, the euro loan has a 1% Libor floor and is talked to price at 99.

As previously reported, Dell is marketing a $4 billion 61/2-year covenant-light term loan B (Ba2/BB+/BB+) and a $1.5 billion five-year covenant-light term loan C (Ba2/BB+/BB+).

The dollar-denominated term loan B is talked at Libor plus 375 bps with a 1% Libor floor and an original issue discount of 99, and the term loan C is talked at Libor plus 275 bps to 300 bps with a 1% Libor floor and a discount of 991/2, sources said.

Amortization on the term loan B is 1% per annum, while the term loan C amortizes at 10% per annum.

Commitments for the term loans are due Monday, sources added.

The company's senior secured credit facility also provides for a $2 billion asset-based revolver.

BofA Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC, RBC Capital Markets and UBS Securities LLC are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by Michael Dell, founder, chairman and chief executive officer, and Silver Lake for $13.75 per share plus a special dividend at or before closing of $0.13 per share.

The addition of the euro-denominated term loan is expected to decrease the amount of high-yield notes Dell is selling. Earlier in the week, Dell announced a $3.25 billion two-part offering of secured notes.

Dell is a Round Rock, Texas-based provider of technology and business products and services.

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