ProSiebenSat.1 Offers Higher Interest Rate on Extended Loan Deal

ProSiebenSat.1 Media AG, the German broadcaster controlled by KKR & Co. and Permira Advisers LLP, is offering to pay a higher interest rate as it seeks to extend about 1.9 billion euros ($2.5 billion) of loans, according to four people with knowledge of the matter.

The company proposed an initial interest margin of 275 basis points, or 2.75 percentage points, more than benchmark rates on the new term loan D3, said the people, who asked not to be identified because the deal is private. Holders of the company’s existing term loan C and D, which offered lenders margins of 187.5 and 250 basis points respectively, have been invited to roll their commitments into the new facility.

The Term Loan D3 will have a July 2018 maturity and the term loan C and D are due to repay in 2015 and 2016, Axel Salzmann, ProSiebenSat.1’s chief financial officer, said in a May 7 conference call. The Munich-based company, which broadcasts Germany’s version of “The Voice”, plans to reduce its term loans to 1.86 billion euros using 500 million euros of proceeds from the sale of its SBS Nordic unit, he said.

Lenders that agree to the extension request and commit funds to the new facility have been offered fees of 25 basis points, said the people. UniCredit SpA and BNP Paribas SA are arranging the extension process, they said.

An official at ProSiebenSat.1, who asked not to be identified citing company policy, declined to comment on the financing. A spokesman for KKR also declined to comment. Noemie de Andia, a spokeswoman for Permira, didn’t return an e-mail and telephone call seeking comment.

Higher Earnings

The company, which competes with Bertelsmann SE’s RTL Group SA in Germany, generated revenues of 563 million euros in the three months through March, it said in a May 7 statement. Recurring earnings before interest, taxes, depreciation and amortization rose 4.7 percent to 128 million euros and its ratio of debt to Ebitda was 2.1 times.

Chief Executive Officer Thomas Ebeling has taken steps to facilitate an exit for KKR and Permira, including proposing a more than quadrupled dividend for 2012 and a conversion of preferred into common shares. The private-equity companies bought their holdings in 2006, according to a statement on the German broadcaster’s website.

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