Published on 10/28/2008 in the Prospect News High Yield Daily.
New Issue: Dealers roll Avaya $1.45 billion LBO bridge loan into notes
By Paul A. Harris
St. Louis, Oct. 28 - Underwriters converted Avaya Inc.'s $1.45 billion bridge loan into two tranches of seven-year notes (Caal/B-/) on Friday, the loan's one-year anniversary date, according to a syndicate source.
The conversion included $700 million of 9¾% senior cash pay notes and $750 million 10 1/8% senior payment-in-kind toggle notes. The toggle note coupon steps up 75 basis points if the issuer elects to make an in-kind, as opposed to cash, payment.
No issue price was announced, the source said, adding that the transaction involved the bridge lenders being converted into notes.
Citigroup, Morgan Stanley & Co. Inc. and J.P. Morgan Securities Inc. were the underwriters for the Rule 144A notes.
Proceeds will be used to fund the leveraged buyout of Avaya by Silver Lake and TPG Capital.
Avaya is a Basking Ridge, N.J., provider of communication systems, applications and services.
| Issuer: | Avaya Inc.
|
| Total amount: | $1.45 billion
|
| Maturity: | Nov. 1, 2015
|
| Underwriters: | Citigroup, Morgan Stanley & Co. Inc., J.P. Morgan Securities Inc.
|
| Trade date: | Oct. 24
|
| Settlement date: | Oct. 24
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A
|
|
|
| Senior notes
|
| Amount: | $700 million
|
| Security description: | Senior notes
|
| Coupon: | 9¾%
|
| Call protection: | Make-whole at Treasuries plus 50 bps until Nov. 1, 2011, then at 104.875, 102.438, par on and after Nov. 1, 2013
|
| Equity clawback: | Until Nov. 1, 2011 for 35% at 109.75
|
| Change-of-control put: | 101.0
|
|
|
| Senior PIK toggle notes
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| Amount: | $750 million
|
| Security description: | Senior PIK toggle notes
|
| Cash coupon: | 10 1/8%
|
| PIK coupon: | 10 7/8%
|
| Call protection: | Make-whole at Treasuries plus 50 bps until Nov. 1, 2011, then at 105.063, 102.532, par on and after Nov. 1, 2013
|
| Equity clawback: | Until Nov. 1, 2011 for 35% at 110.125
|
| Change-of-control put: | 101.0
|
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