Red Ventures firms OID on $400 million second-lien term loan at 98.5

By Sara Rosenberg

New York, Oct. 17 – Red Ventures finalized the original issue discount on its $400 million eight-year covenant-light second-lien term loan (Caa1/B-) at 98.5, the tight end of revised talk of 98 to 98.5 but wide of initial talk of 99, according to a market source.

Pricing on the second-lien term loan is still Libor plus 800 basis points with a 0% Libor floor, and the debt still has hard call protection of 102 in year one and 101 in year two.

Earlier in syndication, pricing on the second-lien term loan was increased from talk in the range of Libor plus 725 bps to 750 bps.

The company is also getting a $2 billion seven-year covenant-light first-lien term loan (B1/B+) priced at Libor plus 400 bps with a 0% Libor floor and an original issue discount of 99.

The 101 soft call protection on the first-lien term loan was extended to one year from six months, the source said.

Previously in syndication, pricing on the first-lien term loan was flexed up from talk in the range of Libor plus 325 bps to 350 bps and the discount widened from 99.5.

Other changes made earlier included adjusting the incremental allowance and modifying the MFN.

The company’s $2.6 billion of credit facilities also include a $200 million revolver (B1/B+).

Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Fifth Third, MUFG and PNC are the leads on the deal.

Allocations are targeted for Wednesday.

Proceeds will be used to help fund the acquisition of Bankrate for $14.00 per share in cash. The transaction values Bankrate at an enterprise value of about $1.4 billion.

Closing is expected this year, subject to approval by Bankrate shareholders, regulatory approval and other customary conditions.

Red Ventures is a Charlotte, N.C.-based digital consumer choice platform. Bankrate is a New York-based online publisher, aggregator and distributor of personal finance content.

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