Zayo refinances $1.6 billion of its debt

Zayo has once again gone to the refinancing well, announcing on Thursday that it secured a $1.6 billion term loan facility.

By getting this loan, which will bear interest at LIBOR (London Interbank offered rate) plus 3.5 percent, Zayo said it expects to save about $12 million in annual interest payments.

The competitive provider also increased its revolving credit facility by $25 million to $250 million through the addition of Citibank, N.A. to the lender group.

This is the second time Zayo has refinanced its debt in less than six months. In October, Zayo reduced the rate on its term loan facility to LIBOR plus 4 percent with a minimum of 1.25 percent.

For this transaction, Morgan Stanley, Barclays Capital and RBC Capital Markets served as joint bookrunners and SunTrust, UBS and Goldman Sachs served as co-managers on the term loan repricing. SunTrust acted as the agent on the revolving credit facility.

Zayo completed what was one of the competitive telecom industry segment's largest acquisitions last July by purchasing AboveNet, in addition to a number of smaller deals like FiberGate and First Telecom Services. This latest refinancing action could be a preview of more deals to come in 2013.

Acquisitions have been a key way that Zayo has expanded its fiber footprint to serve a mix of wholesale and increasingly retail services with expanded metro fiber and on-net buildings. As noted by Vertical Systems Group in its latest Ethernet Leaderboard report, Zayo's purchase of AboveNet, which gives it an expanded U.S. and European network footprint, has helped increase the company's retail Ethernet presence.

For more:
- see the release

Special report: Sizing up 2012's top wireline mergers and acquisitions

Related articles:
tw telecom, Level 3 dominate the competitive Ethernet market
Zayo lays out fiber plans for Jacksonville
Zayo's fiscal Q2 revenue rises to $243.5 million from acquisitions, on-net fiber buildouts
Zayo announces 100G routes in Northeast corridor
Zayo broadens U.S., Europe reach with AboveNet deal

Suggested Articles

Equinix is boosting enterprises' journeys to the hybrid cloud by offering a private cloud onramp with Amazon Web Services (AWS.)

According to a report by Crehan Research, three of the largest hyperscale cloud providers account for the bulk of white box data center Ethernet shipments.

It's a triple play of announcements on Tuesday for white box startup Arrcus, including a $30 million Series B round of funding.