Cumulus Media retranches, breaks; DG FastChannel, Quad/Graphics free up; Reynolds fills out

By Sara Rosenberg

New York, July 22 - Cumulus Media Inc. upsized its first-lien term loan while downsizing its revolver, and then trading in the deal commenced in the afternoon, with the first-lien term loan as well as the second-lien term loan quoted above their original issue discount prices.

Also making their way into the secondary market above their issue prices on Friday were the term loans from DG FastChannel Inc. and Quad/Graphics Inc.

In more loan happenings, Reynolds Group's new term loan is subscribed ahead of Monday's commitment deadline, and the amendment to its existing credit facility has received enough support from lenders to pass.

Cumulus reworks sizes

Cumulus Media decided to revise the size on its seven-year first-lien term loan (Ba2/BB) to $1.325 billion from $1.25 billion, with the funds coming from the five-year revolver (Ba2/BB) that was downsized to $300 million from $375 million, according to a market source.

J.P. Morgan Securities LLC, UBS Securities LLC, Macquarie Capital, RBC Capital Markets LLC and ING Financial Markets LLC are the lead banks on the deal.

Proceeds, along with $500 million of equity from Crestview Partners and Macquarie Capital, will be used to fund the acquisition of Citadel Broadcasting Corp. for $37 per share, or $2.4 billion, and to refinance outstanding debt.

Under the agreement, Citadel stockholders have the option to receive the per-share payment in cash or get 8.525 shares of Cumulus common stock, subject to proration.

Cumulus pricing details

As was previously reported, pricing on Cumulus' first-lien term loan is Libor plus 450 basis points with a 1.25% Libor floor and an original issue discount of 99. There is 101 soft call protection for one year and a 225 bps ticking fee from allocation. The spread recently firmed at the high end of the Libor plus 425 bps to 450 bps talk.

The company's $2.415 billion credit facility also includes a $790 million 71/2-year second-lien term loan (B2/B-) priced at Libor plus 600 bps with a 1.5% Libor floor and a discount of 981/2. This tranche is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

During syndication, the second-lien term loan was added as the first-lien term loan was downsized from $2.04 billion. Prior to the downsizing, the first-lien loan was talked at Libor plus 375 bps to 400 bps with a 1.25% Libor floor, a discount of 99 to 99½ and 101 soft call protection for one year.

Cumulus trades atop OID

With the final structure in place, Cumulus' credit facility was able to allocate and begin trading, with the first-lien term loan quoted at 99¼ bid, 99¾ offered, according to a trader.

And, the company's second-lien term loan quoted at 99½ bid, no offers, the trader remarked.

Closing on the acquisition is expected by the end of this year, subject to customary conditions, including Citadel stockholder approval, expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and regulatory approval from the Federal Communications Commission.

Cumulus is an Atlanta-based radio broadcaster. Citadel is a Las Vegas-based radio company.

DG FastChannel frees up

DG FastChannel's credit facility also hit the secondary market on Friday, with the $490 million seven-year term loan B quoted at 99 1/8 bid, 99½ offered on the break and then it moved to 99¼ bid, 99½ offered, according to a trader.

Pricing on the B loan is Libor plus 450 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, pricing firmed at the wide end of talk of Libor plus 425 bps to 450 bps with a discount of 99 to 991/2.

The company's $640 million credit facility (B1/BB-) also provides a $150 million five-year revolver.

J.P. Morgan Securities LLC and Bank of America Merrill Lynch are the lead banks on the deal.

DG funding acquisition

Proceeds from DG FastChannel's credit facility will be used to help fund the purchase of MediaMind Technologies Inc. for $22 per share in cash.

The total transaction value is $517 million equity value or $414 million enterprise value, taking into account over $100 million in cash on MediaMind's balance sheet.

Closing is expected in the third quarter, subject to the successful completion of the tender offer, regulatory approval and customary conditions. Early termination under Hart-Scott-Rodino has already been obtained.

DG FastChannel is an Irving, Texas-based provider of digital media services. MediaMind is a New York-based provider of integrated digital advertising services.

Quad/Graphics starts trading

Another deal to break was Quad/Graphics, with its $200 million seven-year term loan B quoted at par 1/8 bid, par 5/8 offered on the open and then it moved to par ¼ bid, par ¾ offered, according to a trader.

Pricing on the term loan B is Libor plus 300 bps with a 1% Libor floor, and it was sold at an original issue discount of 991/2. There is 101 soft call protection for one year.

The B loan was downsized from $300 million during the syndication process, the Libor floor tightened from 1.25% and the discount came at the low end of the 99 to 99½ guidance.

The company's $1.5 billion credit facility (Ba2/BBB-) also includes an $850 million five-year revolver and a $450 million five-year term loan A, both priced at Libor plus 225 bps.

The revolver was upsized from $800 million and the term loan A was upsized from $400 million at the term loan of the term loan B downsizing.

Quad/Graphics repaying debt

Proceeds from Quad/Graphics' new credit facility will be used to refinance an existing senior secured credit facility that was obtained in 2010 as a $530 million four-year revolver and a $700 million six-year term loan B, of which about $685 million was outstanding as of March 31.

The existing term loan B is priced Libor plus 400 bps with a 1.5% Libor floor, and it was sold at an original issue discount of 981/2.

J.P. Morgan Securities LLC is the lead bank on the new deal.

Quad/Graphics is a Sussex, Wis.-based provider of print and related services.

Reynolds going well

Back over in the primary, Reynolds Group's new $2 billion senior secured term loan due August 2018 (Ba3/BB-) is fully subscribed, and the amendment to the existing facility has been approved, according to a market source.

The new term loan is talked at Libor plus 525 bps with a 1.25% Libor floor and an original issue discount of 99, and, as part of the amendment, the existing term loan due February 2018 is being repriced at Libor plus 525 bps with a 1.25% Libor floor from Libor plus 325 bps with a 1% floor currently.

Also, the new term loan has two years of 101 soft call protection, and there will 101 soft call protection for one year on the existing term loan. These call premiums were added earlier in the process.

The new term loan has a delayed-draw fee that is the full spread for 90 days from closing. This had been revised about a week ago from half the spread for 30 days and the full spread thereafter.

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are leading the deal.

Reynolds buying Graham

Proceeds from Reynolds' new term loan, $1.5 billion of senior secured notes, $500 million of senior unsecured notes and cash on hand will be used to fund the purchase of Graham Packaging Co. Inc. for $25.50 per share, or a total of about $4.5 billion, including assumed debt.

The amendment to the existing credit facility is needed to allow for the new financing.

Existing lenders are being offered a 5 bps amendment fee. Originally, there was no fee, but that was changed earlier in the process.

Closing is expected in the second half of this year, subject to customary regulatory approvals and conditions, including the approval of Graham's stockholders.

Pro forma for the deal, net senior secured leverage is 3.5 times and net total leverage is 6.0 times.

Reynolds is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products. Graham is a York, Pa.-based supplier of plastic containers.

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