Zayo bidders attract ‘$10bn orders for $2.58bn bonds’

Zayo bidders attract ‘$10bn orders for $2.58bn bonds’ as takeover moves closer

21 February 2020 | Alan Burkitt-Gray

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Investors seemed keen last night to buy $2.58 billion worth of bonds from the joint venture that is set to buy the Zayo Group.

Front Range BidCo, the vehicle set up by Digital Colony Partners of the US and EQT Infrastructure of Sweden for $14 billion, announced the prices of the bonds only yesterday evening.

Yet financial news sources said the joint venture had already drawn over $10 billion worth of orders. “Investors piled into new paper from a well-known name despite tight pricing,” said Reuters.

The agency quoted an unnamed person “close to the deal” as saying of Zayo: “It’s a name that has been in the market for a long time, is viewed as pretty defensive and stable. It came in tight for the market, but not crazy.”

According to the reports, Front Range BidCo is due to borrow $5.56 billion to help fund the acquisition, which is expected to be completed by mid-April.

Digital Colony, led by Marc Ganzi (pictured), and EQT, the joint owners of Front Range BidCo, will also contribute $6.388 billion worth of equity to fund the purchase. Both investment groups have been raising money in new funds and by selling off non-core assets in recent months.

Zayo said yesterday’s offer of $2.58 billion worth of bonds will close on or about 9 March. The proceeds will be placed into escrow to be used to finance a merger of Front Range BidCo with and into Zayo, and Zayo will continue as the surviving corporation.