Reuters: Private Equity: RLPC: Formula One seeks rate cut on term loan

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RLPC: Formula One seeks rate cut on term loan May 8th 2012, 17:43 By Smita Madhur NEW YORK | Tue May 8, 2012 1:43pm EDT NEW YORK May 8 (Reuters) - Less than a month after it cleared its refinancing through the leveraged loan market, Formula One is said to be launching a transaction that would cut the rate on its institutional term loan, buyside sources told Thomson Reuters LPC. The refinancing transaction will be launched Thursday and will be contingent on a successful initial public offering of the company. The new loan will have reduced pricing and will mature in 2018, sources said. Formula One's existing $1.38 billion term loan B, sold to institutional investors in April, has a 2017 maturity. Formula One is planning to launch its IPO the week of June 12, sources said. The company plans to pay down about $450 million of debt, and in turn, leverage will decline to around 3.6 times. In April, Formula One priced its $1.38 billion institutional term loan B due 2017 at 450bp over Libor with a 1.25 percent Libor floor. The loan was sold at 99 cents on the dollar. The rest of the credit was filled out by a $70 million revolving line of credit due 2017 and an $817 million term loan C due 2018. The term loan C is said to have been sold to "friends and family" of Formula One sponsor CVC Capital. The $1.38 billion term loan B was successfully syndicated in both the U.S. and Europe by Goldman Sachs and RBS, which led the cross-border deal on a best efforts basis. Formula One has a B+ corporate credit rating and a BB- facility rating. Formula One proposed to use the funds from the overall $2.267 billion credit as follows: $1.784 billion to repay existing bank debt due 2012-14, $1.06 billion to issue a dividend, $46 million to put cash on the balance sheet and another $46 million in estimated fees and expenses. As part of the dividend recap, the refinancing allowed Formula One's shareholders, including majority owner CVC Capital, to transfer around $1 billion of cash to holding company Delta Topco for a range of purposes, including dividends and acquisitions. CVC Capital bought Formula One in April 2006, backed by $2.1 billion of debt. In 2007, the debt was recapitalized with $2.92 billion of debt consisting of an $800 million term loan A at 200bp over Libor, a $1.4 billion term loan B at 237.5bp over Libor, a $70 million revolving credit at 200bp over Libor and a $650 million second-lien loan at 350bp over Libor. Link this Share this Digg this Email Reprints

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