EMI lifts term B to $1.15 billion, trims placed notes to $403 million

By Sara Rosenberg

New York, Feb. 24 - EMI Music Publishing upsized its six-year term loan B to $1.15 billion from $1.05 billion and reduced its privately placed notes to $403.3 million from $503.3 million, according to a market source.

Pricing on the term loan B is Libor plus 425 basis points with a 1.25% Libor floor and an original issue discount of 99, and there is 101 soft call protection for one year.

Earlier, the term loan B was flexed down from Libor plus 475 bps with a discount of 981/2.

Amortization on the term loan B is 1% per annum with the balance due at maturity.

Recommitments were due at 5 p.n. ET on Friday.

The company's now $1.225 billion senior secured credit facility (Ba3/BB-) still includes a $75 million five-year revolver that is priced at Libor plus 475 bps with a 1.25% Libor floor and a 75 bps undrawn fee that is subject to one step-down.

Financial covenants include minimum interest coverage and maximum leverage ratios.

Security is first-priority liens on and interests in substantially all the present and after-acquired tangible and intangible assets of the borrower and each guarantor, subject to certain exceptions.

UBS Securities LLC is the lead bank on the deal.

Proceeds will be used to help fund the acquisition of EMI by Sony/ATV Music Publishing, a subsidiary of Sony Corp. of America that is co-owned by trusts formed by the Estate of Michael Jackson, along with an investor group that includes Mubadala Development Co. PJSC, Jynwel Capital Ltd., GSO Capital Partners LP and David Geffen.

The company is being bought for total consideration of $2.2 billion from a wholly owned subsidiary of Citigroup Inc.

With the transaction, Sony Corp. of America will invest about $325 million and, in conjunction with the Estate of Michael Jackson, own roughly 38% of the newly formed entity, with an ability to increase the investment and ownership up to 40%.

The debt being obtained will be non-recourse to Sony Corp. of America.

Equity for the transaction is $804 million, increased from the $790 million amount conveyed in the original structure, the source added.

Closing is subject to certain conditions, including regulatory approvals.

EMI Music Publishing is a music publisher. Sony/ATV is a New York-based owner and administrator of copyrights by artists.

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