West LBO financing package to include $2.3 billion credit facility, $1.1 billion bonds

By Sara Rosenberg

New York, July 13 - West Corp. outlined details on its leveraged buyout debt financing package, which will include a $2.3 billion credit facility and $1.1 billion of high-yield bonds, according to an SC 13E3 filed with the Securities and Exchange Commission Thursday.

Lehman, Deutsche and Bank of America are joint bookrunners on the credit facility and Lehman and Deutsche are joint lead arrangers. Lehman is also acting as administrative agent, and Deutsche and Bank of America are acting as syndication agents.

The credit facility consists of a $2.05 billion seven-year term loan and a $250 million six-year revolver, with both tranches talked at Libor plus 225 basis points. The revolver has a 50 bps commitment fee.

There is a $450 million accordion feature under the credit facility.

The bond offering is expected to be comprised of $550 million of senior subordinated notes and $550 million of senior notes.

Deutsche, Lehman and Bank of America are leading the bond deal, with Deutsche the left lead.

As a backup for the bonds, the company has gotten a commitment for a $1.1 billion 365-day senior subordinated bridge loan at Libor plus 525 bps, with the interest rate increasing by 50 bps after six months and by another 50 bps after an additional three months. There is a 10% cap on the interest rate.

West is being acquired by an investor group led by Thomas H. Lee Partners and Quadrangle Group LLC.

Under the terms of the agreement, all stockholders except Gary West, chairman of the board, and Mary West, vice chairman of the board, will receive $48.75 per share in cash. Gary and Mary West will receive $42.83 per share in cash for about 85% of their current ownership and about 15% of their current ownership will convert into shares of the corporation surviving the merger.

The transaction values the company at $4.1 billion, including debt as of the date of the definitive agreement.

Closing on the LBO is expected to occur in the fourth quarter and is subject to customary conditions, including the approval of West stockholders.

West is an Omaha, Neb., provider of outsourced communication services.

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