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Leap Wireless said to seek $1.43 billion loan to refinance bonds

Leap Wireless International Inc., the pay-as-you-go wireless carrier, is seeking a $1.43 billion term loan to refinance bonds, according to a person with knowledge of the transaction.

Deutsche Bank AG is leading the financing and will host a lender call on Feb. 25 at 1 p.m. in New York, said the person, who asked not to be identified because the deal is private.

The seven-year debt may pay interest at 3.5 percentage points more than the London interbank offered rate, with a 1.25 percent minimum, the percent said. Libor is a rate banks charge to lend to each other.

Leap (Nasdaq: LEAP), based in San Diego, may sell the debt at 99 cents on the dollar, the person said, reducing proceeds for the borrower and boosting the yield for investors.

Lenders are offered one year of 101 soft-call protection, the person said, meaning Leap would have to pay a one-cent premium to reprice the debt in its first year.

Proceeds of the loan will be used to refinance Leap’s 7.75 percent bonds due in 2016 and 4.5 percent convertible notes maturing in 2014, said the person.

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