Internet Brands discloses talk on first- and second-lien term loans

By Sara Rosenberg

New York, Aug. 4 – Internet Brands Inc. released price talk on its $1.04 billion seven-year covenant-light first-lien term loan (B2) and $650 million eight-year covenant-light second-lien term loan (Caa2), according to a market source.

The first-lien term loan is talked at Libor plus 350 basis points to 375 bps with a 0% Libor floor and an original issue discount of 99.5, and the second-lien term loan is talked at Libor plus 750 bps to 775 bps with a 0% Libor floor and a discount of 99, the source said.

Included in the first-lien term loan is 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two.

Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC, Citigroup Global Markets Inc., Bank of America Merrill Lynch, KKR Capital Markets LLC, Macquarie Capital (USA) Inc. and Mizuho Bank Ltd. are the arrangers on the $1.69 billion in term loans, with Credit Suisse the left lead on the first-lien loan and RBC the left lead on the second-lien loan.

Commitments are due at 5 p.m. ET on Aug. 15.

The term loans launched with a bank meeting this past Tuesday, but the company was waiting on ratings before coming out with price talk.

Along with the new term loan debt, the company is seeking an amendment and extension of its existing first-lien term loan to make it fungible with the new tranche.

The amended and extended term loan is talked with an original issue discount of 99.5, the source added.

Proceeds from the new term loans will be used to help fund the acquisition of WebMD Health Corp. for $66.50 per share, or about $2.8 billion.

Other funds for the transaction will come from equity.

Closing is expected in the fourth quarter, subject to customary conditions.

The borrowers are MH Sub I LLC and Micro Holding Corp.

Internet Brands, a KKR portfolio company, is an El Segundo, Calif.-based provider of vertically focused online media and software services. WebMD is a New York-based provider of health information services.

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