| NEW YORK
NEW YORK Dec 20 Bankrupt wireless
communications firm LightSquared Inc is once again seeking to
raise exit financing, sources said Friday. The company is now
targeting a $2-2.5 billion senior secured first-lien exit term
loan, sources added.
JP Morgan and Credit Suisse are sounding out investors on
the financing, sources said. The banks are not committed or
contracted to providing or arranging the credit, the same
LightSquared was unavailable to comment by press time.
LightSquared had attempted to raise a $3 billion exit loan
in June and July through Jefferies but pulled the financing when
Dish Chairman Charlie Ergen emerged as the largest creditor for
Ergen and Dish's July bid for LightSquared, combined with
the expiration of the exclusivity period for the company to put
forth a restructuring plan, allowed the company's biggest
creditor group to push for LightSquared's sale.
The uncertainty around LightSquared's bid to remain
independent helped derail the financing, leading to subsequent
lawsuits filed by LightSquared and its biggest shareholder
Harbinger Capital Partners against Dish, Ergen and related
In the latest attempt to secure exit financing, LightSquared
is offering a three-year loan with a 12 percent coupon, all
payable-in-kind, and would be sold at a discount price of
between 95 and 97.
The maturity could be extended by a year, subject to a
minimum liquidity test. Lenders would receive a 1.5 point fee
for agreeing to an extension.
Given that LightSquared's wireless network build out plans
remain suspended by the Federal Communications Commission (FCC),
lenders have been asked to commit to the deal for six months
with a potential three-month extension.
Lenders would be paid a 100bp fee upon confirmation of
LightSquared's restructuring plan in bankruptcy court. If
LightSquared exercises the commitment extension while in
bankruptcy, lenders would receive a 50bp fee.
In addition, the loan would be subject to a minimum
liquidity covenant during the extension period.
The exit loan would not be callable for the first year and
then would have 106 and 103 call protection for the next two
The closing of the loan depends on additional equity
injected into the company post-bankruptcy and the FCC allowing
LightSquared to resume developing its spectrum.
A pre-taped roadshow will be available beginning December 26
with a lender call scheduled for January 6.
The company is asking for lender commitments by January 8.