Mitel cuts spread on $300 million covenant-light loan to Libor plus 375 bps

By Paul A. Harris

Portland, Ore., Sept. 20 – Mitel Networks Corp. tightened spread talk on its $300 million six-year covenant-light term loan B (B1/B+) to Libor plus 375 basis points from earlier talk of 400 bps to 425 bps, according to a market source.

The deal retains a 1% Libor floor and an original issue discount of 99.5, according to the source.

The term loan has 101 soft call protection for six months and amortization of 1% per annum, the source said.

BMO Capital Markets Corp., Citizens Bank, HSBC Bank and CIBC are the bookrunners on the deal.

Commitments were due on Wednesday.

Proceeds will be used with cash on hand and revolving credit facility borrowings to fund the acquisition of ShoreTel for $7.50 per share, or a total equity value of about $530 million and a total enterprise value of around $430 million.

Closing is expected in the third quarter, subject to customary conditions.

Mitel is an Ottawa-based provider of communications software solutions. ShoreTel is a Sunnyvale, Calif.-based provider of communication solutions.

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