TNS gets commitment for $240 million credit facility from GECC

By Sara Rosenberg

New York, April 5 - TNS Inc. has received a commitment for a new $240 million senior secured credit facility to help fund its modified "Dutch" auction tender offer to purchase up to 9 million shares of its outstanding common stock, according to a commitment letter filed with the Securities and Exchange Commission Tuesday.

GECC Capital Market Group Inc. is the sole lead arranger and sole bookrunner on the deal and is in the process of scheduling a bank meeting to launch the deal into syndication, a company spokesperson told Prospect News.

The facility will consist of an up to $30 million five-year revolving credit facility and an up to $210 million seven-year term loan B, with both tranches talked at Libor plus 175 basis points, the filing said.

Spreads will be increased by 25 basis points if the deal receives a senior secured credit rating of less than Ba3 from Moody's Investors Service Inc. or BB- from Standard & Poor's.

Both the revolver and the term loan B carry a step down in pricing to Libor plus 150 basis points if leverage is less than or equal to 2.25 to 1.00, the filing added.

The revolver carries a commitment fee of 50 basis points that can go down to 37.5 basis points if total leverage is less than 1.50 to 1.00.

Borrowings under the revolver will be used to finance working capital needs and to finance future permitted acquisitions.

Under the tender, the company is offering to purchase up to 9 million shares of its outstanding common stock at a price per share of a minimum $18.00 and a maximum $18.50, for a total purchase price of up to $166.5 million.

This tender offer will expire, unless extended, on May 3.

"With the assistance of management and outside advisors, a special committee of independent directors of our board not affiliated with our controlling stockholder has undertaken a review of the company's strategic plan, its use of cash flows from operations for, among other things, capital expenditures, acquisitions, debt repayment and share repurchases, and a variety of alternatives for using the company's available financial resources," said John J. McDonnell Jr., TNS' chairman and chief executive officer, in a company news release.

"Based upon its review, the special committee of the board, and upon the recommendation of the special committee, the board determined that increasing the company's financial leverage to fund the tender offer is a prudent use of our financial resources and an effective means of providing value to our stockholders."

TNS is a Reston, Va., provider of business-critical, cost-effective data communications services for transaction-oriented applications.

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