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J2 Global amends credit facility to add $405 million bridge loan
By Marisa Wong
Los Angeles, June 3 – J2 Global, Inc. entered into a first amendment on June 2 to its credit agreement dated April 7 with Citicorp North America Inc. and MUFG Union Bank, NA as lenders and MUFG Union Bank, NA as administrative agent for the issuance of a $405 million senior secured term loan, according to an 8-K filing with the Securities and Exchange Commission.
In addition to adding the bridge loan, the amendment permits the spinoff of a portion of J2’s cloud services business into a new publicly traded company and provides for some other changes.
Citicorp North America has committed to provide $243 million of the bridge loan, and MUFG Union Bank has committed to provide $162 million.
The bridge loans will bear interest at Libor plus 300 basis points initially. Beginning six months after the funding date until 12 months after the funding date, the interest rate will step up to Libor plus 350 bps. From 12 months after the funding date until repayment of the loans, interest will be Libor plus 400 bps.
The bridge loan will mature 364 days after the funding date, with two automatic extensions, each for an additional three months, if SEC approval of the spinoff transaction is still outstanding.
J2 is required to pay a funding fee of 0.5% of the aggregate principal amount of bridge loans made on the funding date, as well as a duration fee of 0.25% of the aggregate principal amount of outstanding bridge loans on the sixth-month anniversary of the funding and a fee of 0.5% of the aggregate principal amount of outstanding bridge loans on each of the nine-, 12-month and 15-month anniversaries of the funding.
Loan proceeds will be used to redeem J2’s 3.25% convertible senior notes due 2029.
J2 is a digital media company based in Los Angeles.
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