Formula 1 launches $2.9 billion term loan with Libor plus 250 bps spread at 99.75-99.875

By Paul A. Harris

Portland, Ore., Jan. 22 – Formula 1, a subsidiary of Delta Topco Ltd., launched a $2,902,000,000 first-lien term loan refinancing on a Monday call with lenders, according to a market source.

The deal launched at a 250 basis points spread to Libor atop a 1% Libor floor at 99.75 to 99.875. There are six months of soft call protection at 101.

Commitments are due Jan. 29.

J.P. Morgan Securities LLC is the lead.

The refinancing, which encompasses $3,303,000,000 Formula 1 (Delta Topco) first-lien term loan debt, also involves the repayment of $400 million of that debt using a combination of excess cash on the balance sheet and loans under the first-lien revolving credit facility, subject to obtaining necessary consents and funding of the relevant loans, according to a Monday press release.

As of Dec. 31, 2017, the first-lien revolver was undrawn.

The contemplated transaction will be net leverage neutral.

In February 2017 Formula 1 priced a $3.15 billion first-lien term loan at Libor plus 325 bps with a step-down to Libor plus 300 bps after six months and if a B2 corporate rating was achieved. There was a 1% Libor floor, and the deal came at an original issue discount of 99.5.

In July of 2017 Formula 1 did a $200 million add-on to the loan with the same spread and ratings contingency.

On July 20 Moody's affirmed the B2 rating.

Hence the present loan would decrease Formula 1's interest rate by 50 bps, to 250 bps from 300 bps.

Delta Topco and Formula 1 are subsidiaries of Englewood, Colo.-based Liberty Media Corp., a diversified media company.

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