Media General bid up as amendment pulled; Cablevision, Physio-Control price talk surfaces

By Sara Rosenberg

New York, Sept. 21 – Media General Inc.’s term loan was bid higher in the secondary market on Monday following news that the company pulled its proposed opportunistic amendment request that would have provided more flexibility regarding the debt structure for the Meredith Corp. acquisition.

Over in the primary market, Cablevision Systems Corp. and Physio-Control International Inc. launched their loan transactions, and FullBeauty Brands, Coty Inc./Galleria Co. and Raycom TV are getting ready to bring new deals to market this week.

Media General rises

Media General’s term loan bid strengthened in trading on Monday after the company cancelled plans for an amendment to its existing credit facility, according to a trader.

The term loan was quoted at 99 1/8 bid, 99 3/8 offered versus 99 bid, 99½ offered previously, the trader said.

The pulled amendment would have revised the net first-lien debt incurrence limit to 5.25 times at closing of the acquisition from 4 times, the net secured debt incurrence limit to 5.25 times from 4.5 times and the unsecured debt incurrence limit to 6 times from 5.5 times. This would have given the Media General room to use all senior debt for its acquisition of Meredith.

However, the plan was, and still is, to use a combination of incremental senior secured term loan B debt and bonds for the acquisition, which is why the amendment was simply an opportunistic transaction, a source explained.

After raising the consent fee to 50 basis points from 25 bps last week, the company opted to terminate the amendment proposal, the source added. A memo regarding this decision was sent to lenders on Monday morning.

Media General commitment

For the Meredith acquisition, Media General has received a commitment for $2.8 billion in financing from RBC Capital Markets LLC and JPMorgan Chase Bank. RBC was also leading the amendment.

Under the agreement, Meredith stockholders will receive cash and stock valued at $51.53 per share, for a transaction value of about $2.4 billion. Based on Meredith’s net debt balance of $772 million at June 30, the transaction enterprise value is around $3.1 billion.

Pro forma net leverage at closing is expected to be less than 5.5 times.

Closing is expected by June 30, 2016, subject to approval of Media General and Meredith shareholders, as well as customary closing conditions and regulatory approvals, including approval by the Federal Communications Commission and clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Media General is a Richmond, Va.-based television broadcasting and digital media company. Meredith is a Des Moines, Iowa-based media and marketing company.

Ellucian holds steady

Also in trading, Ellucian’s $1.56 billion seven-year covenant-light term loan B was seen at 99¾ bid, par 1/8 offered on Monday, in line with where it broke for trading late Friday, according to a trader.

Pricing on the term loan is Libor plus 375 bps with a 1% Libor floor, and it was sold at an original issue discount of 99.5. The debt has 101 soft call protection for six months.

During syndication, the term loan was upsized from $1.46 billion as the company’s bond offering was downsized to $490 million from $590 million, and pricing firmed at the tight end of the Libor plus 375 bps to 400 bps talk.

The company’s $1.71 billion credit facility (B) also includes a $150 million five-year revolver.

Ellucian lead banks

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Barclays, Jefferies Finance LLC, BMO Capital Markets Corp. and Deutsche Bank Securities Inc. are leading Ellucian’s credit facility.

Proceeds from the credit facility and bonds will be used to help fund the buyout of the company by TPG Capital and Leonard Green Partners from Hellman & Friedman and JMI Equity.

Closing is expected before year-end, subject to customary conditions, including receipt of regulatory approvals.

Ellucian is a Fairfax, Va.-based provider of higher education software and services.

Cablevision launches

Moving to the primary market, Cablevision held its bank meeting on Monday, launching its $2.3 billion seven-year term loan B with talk of Libor plus 350 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

The company’s $4.3 billion credit facility also includes a $2 billion five-year revolver.

Commitments are due on Friday, the source added.

J.P. Morgan Securities LLC, BNP Paribas and Barclays are leading the deal that will be used with bonds, cash and equity to fund the acquisition of Cablevision by Altice NV for $34.90 in cash and repay $2.5 billion in existing term loans. The enterprise value of the transaction is $17.7 billion.

Net total debt will be 4.9 times including synergies and 7.1 times excluding synergies.

Closing is expected in the first half of 2016, subject to regulatory and other customary approvals.

Cablevision is a Bethpage, N.Y.-based media and telecommunications company. Altice is a Luxembourg-based cable, fiber, telecommunications, contents and media company.

Physio-Control holds call

Physio-Control had its lender call on Monday, launching $63 million in incremental senior secured first- and second-lien term loans, according to a market source.

The debt consists of a $40 million incremental first-lien covenant-light term loan due June 5, 2022 talked at Libor plus 450 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection through Dec. 5, 2015, and a $23 million incremental second-lien covenant-light term loan due June 5, 2023 talked at Libor plus 900 bps with a 1% Libor floor, a discount of 98 and call protection of 102 through June 5, 2016 and 101 through June 5, 2017, the source said.

Commitments are due at 5 p.m. ET on Sept. 29, the source added.

Citigroup Global Markets Inc. is leading the debt that will fund the acquisition of HeartSine Technologies, a Northern Ireland-based automated external defibrillator manufacturer.

Physio-Control is a Redmond, Wash.-based developer, manufacturer, seller and servicer of external defibrillator/monitors and emergency medical response products and services.

FullBeauty readies launch

FullBeauty Brands emerged with plans to hold a bank meeting on Tuesday to launch a $1.29 billion credit facility that consists of a $125 million ABL revolver, an $820 million seven-year first-lien term loan and a $345 million eight-year second-lien term loan, sources said.

J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Jefferies Finance LLC and Deutsche Bank Securities Inc. are leading the deal, with JPMorgan left on the first-lien and Goldman left on the second-lien.

Proceeds will be used to help fund the buyout of the company by Apax Partners LLP from Charlesbank Capital Partners and Webster Capital, but Charlesbank will maintain an ownership interest in the company.

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

FullBeauty Brands is a New York-based catalog retailer and online marketplace for plus-size consumers.

Coty/Galleria on deck

Coty/Galleria set a bank meeting in New York for Tuesday and one in London for Thursday to launch $2 billion in term loans, according to a market source.

The debt consists of a $500 million U.S. term loan B at Coty, a $500 million-equivalent euro term loan B at Coty and a $1 billion term loan at Galleria, with all of the debt talked at Libor/Euribor plus 300 bps with a 0.75% floor and an original issue discount of 99.5, the source said.

The Coty term loans have 101 soft call protection for six months, and the Galleria term loan has no call protection and a ticking fee of half the spread from days 31-60 and the full spread thereafter.

J.P. Morgan Securities LLC, Barclays and Bank of America Merrill Lynch are leading the deal that will be used to help fund the merger of Coty, a New York-based fragrance manufacturer, with Procter & Gamble Co.’s fine fragrance, color cosmetics and hair color businesses.

The transaction values the P&G business at about $12.5 billion, including the assumption of debt.

Raycom coming soon

Raycom TV scheduled a lender call for Thursday to launch a $170 million of add-on term loans, a market source remarked.

The debt consists of a $100 million add-on term loan A, and a $70 million add-on covenant-light term loan B talked at Libor plus 300 bps with a 0.75% Libor floor, in line with existing term loan B pricing, an original issue discount of 99 and 101 soft call protection for six months, the source said.

Wells Fargo Securities LLC, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the deal that will be used to fund the acquisition of stations from Drewry Communications and Hoak Media.

Raycom is a Montgomery, Ala.-based broadcaster and owner and operator of television stations.

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