MegaPath to launch $175 million credit facility on Wednesday

By Sara Rosenberg

New York, April 9 - MegaPath Corp. is scheduled to hold a bank meeting on Wednesday morning to launch a proposed $175 million credit facility, according to a market source.

Societe Generale is the lead bank on the deal.

The facility consists of a $25 million five-year revolver and a $150 million six-year term loan, the source said.

Price talk on the tranches is Libor plus 625 basis points with a 1.25% Libor floor and an original issue discount that is still to be determined, the source added.

Amortization on the term loan is 10% in year one with step-ups, and there is a 50% excess cash flow sweep included in the credit agreement.

Proceeds will be used to refinance existing bank debt.

Senior leverage is 2.1 times.

MegaPath is a provider of managed data, voice and security services.

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