Newsday seeks $650 million fixed-rate term loan

By Sara Rosenberg

New York, June 20 - Newsday LLC is in market with a $650 million secured five-year fixed-rate term loan (B1), according to a market source.

Bank of America, Merrill Lynch and Citigroup are the joint bookrunners on the deal that launched with a bank meeting on Thursday, with Bank of America and Merrill the joint lead arrangers.

The term loan is non-callable for 2½ years.

Commitments are due June 30.

An informed source told Prospect News that the deal is being targeted to a high-yield audience.

Proceeds will be used to help fund Cablevision Systems Corp.'s acquisition of Newsday Media Group from Tribune Co. for $632 million, plus Tribune will also receive $18 million at closing as prepaid rent under certain leases of property used in the business.

Cablevision is buying the business through a new partnership that it is forming. Cablevision will have about 97% and Tribune will have about 3% of the equity in the partnership that will own Newsday.

To form the new partnership, Tribune will contribute the Newsday assets, and Cablevision will contribute newly issued parent company bonds with a fair market value of $650 million on the contribution date.

The completion of this transaction is subject to certain customary closing conditions, including regulatory approval.

Newsday is a daily newspaper serving Long Island and New York City.

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