iPayment sets Tuesday launch for $500 million credit facility

By Sara Rosenberg

New York, April 6 - iPayment Holdings Inc. has scheduled a bank meeting for Tuesday to launch its proposed $500 million senior secured credit facility (B1/B), according to a market source.

Bank of America is lead arranger and bookrunner on the deal.

The facility consists of a $50 million six-year revolver talked at Libor plus 250 basis points with a 50 bps commitment fee and a $450 million seven-year term loan talked at Libor plus 250 bps, the source said.

Under the original commitment letter, the company had said that the revolver tranche would be sized at $25 million, but that it had the ability to upsized to $50 million if sufficient commitments were obtained.

Proceeds from the credit facility, a proposed $285 million senior subordinated notes offering and up to $206 million of equity will be used to fund the company's public-to-private transaction, refinance some existing debt and provide for working capital.

Under the public-to-private proposal, Gregory S. Daily, iPayment's chairman and chief executive officer, and Carl A. Grimstad, iPayment's president, formed iPayment Holdings to purchase the company from stockholders at a price of $43.50 per share in cash.

The transaction, which is expected to be completed in the first half of 2006, is subject to financing, regulatory approvals, stockholders approval and other customary conditions.

iPayment is a Nashville, Tenn.-based provider of credit and debit card-based payment processing services.

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