RailAmerica launches $585 million term loan at Libor plus 300-325 bps

By Sara Rosenberg

New York, Feb. 16 - RailAmerica Inc. launched its $585 million seven-year senior secured term loan (B1/BB+) on Thursday with talk of Libor plus 300 basis points to 325 bps with a 1% Libor floor and an original issue discount of 99 to 991/2, according to a market source.

There is 101 soft call protection for one year, the source said.

Amortization is 1% per annum.

Commitments are due on Feb. 27.

Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and BMO Capital Markets Corp. are the lead banks on the deal.

Proceeds will be used to help fund the company's tender offer for up to $444 million of its 9¼% senior secured notes.

The company has received early tenders for about $513 million of the $518 million notes outstanding and will accept the tendered notes on a pro rata basis.

The bond tender offer is scheduled to expire on Feb. 29 and is subject to completion of the credit facility.

RailAmerica is a Jacksonville, Fla.-based owner and operator of short-line and regional freight railroads.

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