Warner Music LBO expected to bring $1 billion to institutional loan market

By Sara Rosenberg

New York, Jan. 13 - Warner Music Group is expected to launch a $1 billion-plus institutional term loan B as part of its proposed credit facility that would support the company's acquisition by an investor group led by Thomas H. Lee Partners, Edgar Bronfman Jr.'s Lexa Partners, Bain Capital and Providence Equity Partners, a market source said.

The credit facility, which is still slated as first quarter 2004 business, will also contain a revolver component, the source said.

Bank of America, Deutsche Bank, Lehman Brothers and Merrill Lynch are the lead banks on the deal.

No further details on the debt financing are available at this time as specifics are still being nailed down, the source added.

Under the acquisition agreement, the investor group will buy the music company from Time Warner Inc. for about $2.6 billion in cash.

New York City-based Time Warner is expected to reduce its reported net debt by about $2.6 billion following the sale.

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