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Zayo sets terms on $1.85 billion repricing loan

By Natalie Wright

NEW YORK (Reuters) - Bandwidth infrastructure provider Zayo Group aims to cut pricing on $1.85 billion of outstanding loans, joining a wave that has struck the U.S. leveraged loan market, sources told Thomson Reuters LPC.

The deal is led by joint lead arrangers and joint bookrunners Morgan Stanley, Barclays and RBC Capital Markets. Citigroup, Goldman Sachs, SunTrust and UBS are co-managers.

Zayo aims to reprice its $250 million revolver at a spread of LIB+275, subject to a pricing grid. The company seeks to reprice its $1.6 billion term loan B at a spread of LIB+300, with a 1 percent Libor floor, at par.

The term loan is expected to have call protection of 101 soft call for six months. The revolver matures July 2, 2017, while the term loan matures July 2, 2019.

The arrangers are requesting commitments by November 19.

This is the third time this year Zayo has come to market to reduce the spread on its debentures. In February, the company reduced pricing on its then $1.612 billion term loan B to LIB+350, with a 1 percent Libor floor, and a par issue price, from LIB+400 with a 1.25 percent floor. Before that, the company also repriced the term loan B in October 2012.

Zayo attempted to cut pricing on the same loan in September. At that time, the company was looking to reprice at LIB+300 with a 1 percent Libor floor, at par, similar to the latest repricing attempt.

The institutional leveraged loan calendar has nearly 43 percent of loans earmarked for repricing and refinancing, totaling over $20 billion in deal volume, according to Thomson Reuters LPC.

Zayo joins companies such as biopharmaceutical industry name Royalty Pharma, bedding entity Serta Simmons, and pet food manufacturer Blue Buffalo, which are taking advantage of today's hot leveraged loan markets to reprice existing debt. Investors have so far been accommodative, though things could change when and if any potential Fed tapering-related volatility takes place.

Zayo's corporate family ratings are B2(STA)/ B(STA). Borrowers on the credit are Zayo Group LLC and Zayo Capital Inc.

Zayo did not return calls for comment. Morgan Stanley declined to comment.

Zayo Group is a global provider of bandwidth infrastructure services. Zayo's network serves seven countries and 45 states, plus Washington D.C.

(Editing By Jon Methven)

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