Formula One sets first- and second-lien term loan talk with launch

By Sara Rosenberg

New York, July 17 – Formula One Group (Delta 2 (Lux) Sarl) came out with price talk on its $2 billion of new term loans with its bank meeting on Thursday, according to a market source.

The $1 billion seven-year incremental first-lien covenant-light term loan (B) is talked at Libor plus 350 basis points to 375 bps with a 1% Libor floor and an original issue discount of 99½, and the $1 billion eight-year second-lien covenant-light term loan (CCC+) is talked at Libor plus 700 bps with a 1% Libor floor and a discount of 99, the source said.

The company is also looking to amend and extend $2,102,000,000 of existing first-lien covenant-light term loans so that the debt will have a seven-year maturity. Price talk on the extended debt, which will be fungible with the incremental first-lien loan, is also Libor plus 350 bps to 375 bps with a 1% Libor floor.

Existing lenders are being offered a 50 bps fee for the extended first-lien term loans, the source continued.

The incremental and existing first-lien term loans will have 101 soft call protection for six months, and the second-lien term loan will have hard call protection of 102 in year one and 101 in year two.

In addition, the company is looking to amend and extend €40 million of existing first-lien covenant-light term loans so that this debt will also have a seven-year maturity.

Commitments are due on July 28, the source added.

Bank of America Merrill Lynch and RBS Securities Inc. are the lead arrangers on the deal.

Proceeds from the new loans and cash on hand will be used to refinance private high-yield debt and fund a distribution to shareholders.

Formula One is a sports media property, which operates and holds the commercial rights to the Formula One World Championships.

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