Avaya has successfully priced a $2.925 billion senior secured term loan, which was upsized from $2.425 billion, in response to strong market demand. The term loan results in a simplified, single-tranche long-term debt capitalization structure upon emergence at a level consistent with the total debt structure contemplated by Avaya’s Plan of Reorganization.
“The successful upsize and pricing of this senior secured term loan is a very important step in our emergence from chapter 11, simplifies our capital structure, and strengthens Avaya’s ability to pursue future growth opportunities,” said Jim Chirico, Avaya’s President and CEO. The revised capital structure is expected to result in more than $200 million in annual cash interest savings compared to fiscal year 2016.
The term loan will mature in 2024 and bear interest at a rate of LIBOR plus 4.75% per annum, with a 1.00% LIBOR floor. The facility is being arranged by Goldman Sachs Bank USA as administrative agent, syndication agent, joint lead arranger and joint bookrunner, as well as Citigroup Global Markets Inc., Barclays Bank PLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. as joint lead arrangers and joint bookrunners. Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is Avaya’s restructuring counsel.
A hearing to consider confirmation of Avaya’s Plan of Reorganization is scheduled to commence on November 28, 2017. The funding and closing of the term loan is expected to occur in December 2017, concurrent with the anticipated effective date of Avaya’s Plan of Reorganization. The proceeds from the term loan will be used to support Avaya’s emergence from chapter 11.