Clear Channel Increases Loan Extension; Sysco Gets Buyout LoanSridhar Natarajan
Radio and outdoor advertising company Clear Channel Communications Inc. increased the amount of loans on which it’s seeking to extend maturities. Sysco Corp. obtained a financing commitment of $4.75 billion to back its purchase of US Foods.
Clear Channel, which has more than $20 billion of debt, is extending $1.3 billion of term loans that will expire in July 2019, compared with an initial target of $1 billion, according to a statement today. The company is enticing investors to roll their investment into the new term loan by offering more than double the interest rate in order to get three more years to turn around a business that’s posted losses every year since it was purchased by Bain Capital Partners LLC and Thomas H. Lee Partners LP in 2008.
Sysco, a distributor of food to restaurants, received a commitment from Goldman Sachs Group Inc., according to a regulatory filing from the Houston-based company. The debt will be in the form of a 364-day senior unsecured bridge loan facility, a kind of lending that is usually used as a backstop to bond offerings or longer-dated bank borrowings.
Leveraged loans in the U.S. have gained 4.7 percent this year, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index this year. The price on the largest first-lien loans was little changed at 98.15 cents on the dollar.
WTG Holdings III Corp. increased the size of a first lien loan it’s seeking to back its buyout by AEA Investors to $505 million from $475 million, and lowered the rate it is offering to pay on the debt to 3.75 percentage points more than the London interbank offered rate, from 4.25 percentage points more than the benchmark. The deal also includes a $75 million, eight-year covenant-light, second lien loan.
Leon Black’s Apollo Global Management LLC is seeking to raise a $711.3 million collateralized loan obligation with Citigroup Inc. and Bank of America Corp., according to three people with knowledge of the deal.
The private-equity firm, which raised a $608.9 million deal last month, is combining so-called warehouse lines it had established with each bank into one larger deal, which it may price next week, said one of the people, who asked not to be identified because terms haven’t been announced publicly. Warehouses are lines of credits used to buy loans that will be rolled into a CLO.
CLOs pool high-yield, high-risk loans and slice them into securities of varying risk and return.