| NEW YORK
NEW YORK Dec 4 Radio broadcaster Cumulus Media
Holdings set terms Wednesday on a new $2.23 billion
loan to refinance existing debt, sources told Thomson Reuters
The Atlanta, Georgia-based company is marketing a $200
million, five-year revolver and a $2.025 billion, seven-year
first-lien term loan. The company set indicative pricing of
LIB+325-350, with a 1 percent Libor floor, and a 99.5 original
issue discount on the new term loan.
Proceeds will refinance the company's current first- and
second-lien loans. At September 30, Cumulus had $1.24 billion
outstanding on its first-lien term loan due September 2018, and
$785.5 million out on its second-lien term loan due September
The existing first-lien term loan carries a spread of
LIB+350 with a 1 percent Libor floor, while the second-lien term
loan pays LIB+600 with a 1.5 percent Libor floor.
A lender call for Cumulus is scheduled for 2 p.m. Wednesday.
JP Morgan leads the deal.
Cumulus is back after repricing its first-lien term loan a
year ago. With this proposed transaction, the company is trying
to lower costs on its first-lien loans and taking out
higher-cost second-lien loans.
"It's a meaningful improvement in their annual debt service.
They will save upwards of $30-35 million in interest costs which
adds nicely to their free cash flow generation," said Carl
Salas, vice president and senior credit officer at Moody's
Moody's affirmed Cumulus' B2 corporate family rating and
assigned a B1 rating to the new $2.025 billion first-lien term
Cumulus joins companies such as mortgage specialty servicer
Walter Investment Management, residential and business
communications servicer Consolidated Communications, and resort
developer Las Vegas Sands that are striking the refinancing wave
while it's hot and issuing loans to lower interest costs.
Demand for leveraged loans remains robust. Cash into U.S.
leveraged loan mutual funds has maintained a positive streak
since the week ended June 20, 2012, according to data from
Lipper FMI. Year to date loan inflows have reached $59.7
A Cumulus spokesperson said this is part of ongoing balance
sheet management and debt reduction efforts at the company.
JP Morgan did not return calls for comment.
Cumulus owns and operates commercial radio station clusters
throughout the U.S. The company's local radio and digital brands
serve over 65 million listeners.
Additional reporting by Lisa Lee.