Media General Inc. (MEG), the television broadcaster backed by Mario Gabelli and Warren Buffett, is seeking $925 million in loans for its merger with New Young Broadcasting Holding Co. as the price of the floating rate debt climbed to a three-week high.
Media General, owner of 18 TV stations, is seeking a $865 million seven-year delayed-draw term loan that will pay interest at 3.75 percentage points more than the London interbank offered rate with a 1 percent minimum on the lending benchmark, according to a person with knowledge of the deal who asked not to be identified because the information is private. Trident USA Health Services, a clinical laboratory testing services provider, is seeking $570 million in loans, according to another person with knowledge of the matter.
Prices of the largest leveraged loans gained 0.12 cent yesterday to 97.65 cents, the most since June 20, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index. Returns of 2.3 percent through yesterday on loans in the index, are outpacing the year-to-date gains of 1.7 percent on similar junk-rate U.S. corporate bonds
A delayed-draw term loan allows a company to withdraw a pre-determined amount of the total term loan at a particular time or after the completion of a particular action as mentioned in the contract. Upon receipt of regulatory and shareholder approval, Media General is expected to be funded by $540 million, and the rest after the expiration of a call period on existing 11.75 percent senior secured notes.
Trident plans to borrow a $340 million 7-year first lien loan, $155 million of 7.5-year second lien debt and a $75 million revolving-credit line, according to a person familiar with this offering, who asked not to be identified because terms aren’t set. The first lien debt is being offered at 4.5 to 4.75 percentage points more than Libor.
TSL Education Group Ltd. proposed the price for 230 million pounds ($343 million) of loans backing its buyout by TPG Capital, according to two people familiar with the deal, who asked not to be identified because the financing is private.
TSL is proposing to pay 5.5 percentage points more than Libor on a 170 million pound 7-year term loan B, with a 1.25 percent minimum on the lending benchmark. A 60 million pound 7.5-year loan will pay 9.5 percentage points more than Libor, with a similar minimum on the benchmark.
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