RPT-RLPC-Alcatel-Lucent cuts pricing, increases size on loan

Wed Jan 23, 2013 5:42am EST

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NEW YORK Jan 22 (Reuters) - Alcatel-Lucent has cut pricing and increased size by about $540 million on its new multi-currency, covenant-lite credit, sources said.

The credit is now split between a $500 million, 3.5-year, first-lien term loan, a $1.75 billion, six-year, first-lien term loan, and a 300 million euro, six-year, first-lien term loan.

Previously, the six-year, first-lien term loan was split between a $1.275 billion loan, and a 250 million euro loan.

Price talk on the 3.5-year loan is now Libor plus 525 basis points with a 1.25 percent Libor floor and a 99 percent original issue discount (OID). Previously, that loan was talked at Libor plus 600 bp with a 1.25 percent Libor floor and a 98 OID.

The six-year dollar term loan is now talked at Libor plus 625 bp with a 1.25 percent Libor floor and a 99 OID. Previously, that loan was talked at Libor plus 700 bp, with a 1.25 percent Libor floor and a 98 OID.

The six-year euro term loan is now talked at Euribor plus 650 bp, with a 1.25 percent Libor floor and a 99 OID. Previously, that loan was talked at Euribor plus 700 bp, with a 1.25 percent floor and a 98 OID.

The 3.5-year term loan will have 101 soft call protection. The six-year USD and euro tranches will have call protection of non-call in year one, followed by 102, 101.

Commitments were due at 5 p.m. EST January 23.

Credit Suisse and Goldman Sachs underwrote the financing, which is secured by the intellectual property portfolio of Alcatel-Lucent.

The proceeds from the new financing will be used to extend the maturity profile of the telecoms equipment maker over the next several years and provide additional flexibility to finalise operational restructurings, including a 1.25 billion euro cost reduction target.

Alcatel-Lucent, like competitors Ericsson and Nokia Siemens Networks, has been struggling this year as big telecom carriers' lower spending on network equipment and price competition with Chinese players continues. It has launched a program of 5,000 job cuts in a bid to slow the rate at which it burns cash through its business operations.

Alcatel-Lucent's U.S. subsidiary - Alcatel-Lucent USA - is the borrower on the new loan. (Reporting By Nathalie Wright and Isabell Witt)

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