Central European Media gets €469 million five-year loan at 107-190 bps

By Susanna Moon

Chicago, Feb. 22 – Central European Media Enterprises Ltd. said its wholly owned subsidiary CME Media Enterprises BV obtained a €469 million five-year term loan, guaranteed by Time Warner Inc., to refinance its 2017 term loan and 2017 pay-in-kind notes.

Interest on the loan will be Euribor plus a margin of 107 basis points to 190 bps, based on the credit rating of Time Warner, according to an 8-K filing with the Securities and Exchange Commission.

The term loan will mature on Feb. 19, 2021.

In connection with the term loan, CME BV plans to enter into customary interest rate hedging arrangements guaranteed by Time Warner and by CME, the release noted.

Also, CME BV will pay Time Warner a guarantee fee at an all-in rate minus the rate of interest paid by CME BV under the term loan, multiplied by the principal amount of loans outstanding from time to time. This all-in rate will be measured quarterly on the basis of CME’s net leverage and will range from 7% if CME’s net leverage is less than 5 times to 10.5% if net leverage is equal to or greater than 8 times. The fee will be payable semiannually, some which must be paid in cash and the remainder payable in kind.

CME BV may prepay the term loan in whole or in part without premium or penalty upon the occurrence of some events, including when CME’s net leverage ratio is below 5 times for two consecutive quarters and at any time beginning Feb. 19, 2020.

Proceeds of the term loan, along with corporate cash, will be used to repay and discharge CME’s $503 million of outstanding 15% senior notes due 2017 and to repay its $38 million term loan.

CME issued a call to redeem the 2017 notes on April 8.

The company entered into the senior unsecured term credit facility agreement with BNP Paribas, as administrative agent; Time Warner as guarantor; and Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas Securities Corp., Credit Agricole Corporate and Investment Bank, Mizuho Bank, Ltd., SG Americas Securities, LLC and Sumitomo Mitsui Banking Corp. as joint-lead arrangers and joint bookrunners.

“These transactions, which significantly reduce our borrowing costs and improve the maturity profile of our debt, are a big win for all of our shareholders,” Michael Del Nin, co-chief executive officer, said in the company release.

“These transactions reinforce the financial position of the company and ensure that we have the resources necessary to execute on our long-term plan,” Christoph Mainusch, co-chief executive officer, added in the release.

Hamilton, Bermuda-based Central European Media provides programming in Eastern European countries, including the Czech Republic, Bulgaria, Romania, Slovakia, Slovenia and Croatia.

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