Rackspace ups term loan to $2.3 billion, firms at Libor plus 275 bps

By Sara Rosenberg

New York, Feb. 2 – Rackspace Technology Global Inc. upsized its seven-year senior secured covenant-lite first-lien term loan (B1/B+) to $2.3 billion from $2.2 billion and set pricing at Libor plus 275 basis points, the low end of the Libor plus 275 bps to 300 bps talk, according to a market source.

As before, the term loan has a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Citigroup Global Markets Inc., Barclays, BMO Capital Markets, MUFG, J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Mizuho, RBC Capital Markets, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and Apollo are the joint lead arrangers on the deal. Citi is the administrative agent.

Commitments continued to be due at noon ET on Tuesday, the source added.

Proceeds will be used with $550 million of senior secured notes, which were downsized from $650 million with the term loan upsizing, to repay all borrowings outstanding under the company’s existing term loan B and to pay related fees and expenses.

Closing is expected on Friday.

Rackspace is a Windcrest, Tex.-based end-to-end multicloud technology services company.

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