RCN Metro Fiber $240 million term loan talked at Libor plus 450 bps

By Sara Rosenberg

New York, April 29 - RCN Metro Fiber's proposed $240 million six-year term loan is being talked at Libor plus 450 basis points with a 2% Libor floor and an original issue discount of 981/2, according to a market source.

The term loan will launch with a bank meeting in New York on Friday.

The $265 million credit facility also includes a $25 million five-year revolver.

SunTrust, GE Capital and Société Générale are the bookrunners on the deal, with SunTrust the left lead and the administrative agent.

Expected ratings on the facility are mid single-Bs.

Proceeds will be used to help fund the buyout of RCN Corp. by ABRY Partners in a transaction valued at $1.2 billion, including the assumption of debt. RCN stockholders will be receiving $15 per share.

Other financing for the transaction will come from equity and from a $620 million credit facility at RCN Cable that is set to launch on May 7.

The RCN Cable deal consists of a $40 million five-year revolver and a $580 million six-year term loan, with price talk still to be determined, and expected ratings are high single-Bs

Closing on the buyout is expected in the second half of this year, subject to receipt of stockholder approval, regulatory approvals and satisfaction of other customary conditions. The transaction is not subject to any financing condition.

A special meeting of stockholders to vote on the transaction is scheduled for May 19.

RCN is a Herndon, Va.-based broadband services provider.

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