Endurance withdraws $735 million term loan from primary market

By Sara Rosenberg

New York, Feb. 9 – Endurance International Group Holdings Inc. (EIG Investors Corp.) pulled syndication of its $735 million incremental seven-year first-lien term loan due to unfavorable market conditions, according to a market source.

The loan, however, was funded by the lead banks at pricing of Libor plus 500 basis points with a 1% Libor floor and an original issue discount of 97, subject to the payment of an additional upfront fee of 100 bps on Feb. 28 under certain circumstances.

Price talk on the loan during syndication had been Libor plus 500 bps with a 1% floor and discount of 98.

Amortization on the loan is 2% per annum, which was revised from 1% per annum during the syndication effort.

As a result of the most-favored nation pricing provision in Endurance’s existing credit agreement, pricing on its existing term loans increased to Libor plus 523 bps, stepping up to Libor plus 548 bps on Feb. 28 under certain circumstances, with a 1% Libor floor.

The company also got a new $165 million five-year revolver priced at Libor plus 400 bps, subject to a leverage-based step-down, a company news release said.

During the syndication attempt on the term loan, the revolver was downsized from $175 million.

Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA and Jefferies Finance LLC acted as the joint bookrunners and joint lead arrangers on the $900 million of bank debt (B1/B).

Proceeds were used to help fund the acquisition of Constant Contact Inc. for $32.00 per share in cash, for a value of about $1.1 billion.

Other funds for the transaction came from $350 million in 10 7/8% senior unsecured notes that were issued at a price of 98.065.

Endurance is a Burlington, Mass.-based provider of web hosting and online services. Constant Contact is a Waltham, Mass.-based online marketing company.

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