CBS Corp. Closes On $1.46 Billion In Debt Financing As Part Of CBS Radio Spinoff
October 18, 2016 at 5:59 PM (PT)
CBS RADIO INC. has announced that it has closed on the borrowing, through a revolving credit facility, term loan, and bond issue, $1.46 billion (netting $1.44 billion after bank fees, discounts, and commissions). $1.43 billion was distributed to a CBS CORPORATION subsidiary, with $10 million retained by CBS RADIO for corporate purposes and ongoing cash needs. The borrowings are part of the plan to spin CBS RADIO off from CBS CORPORATION and were previously announced on OCTOBER 7th (NET NEWS 10/7), when the company priced the offering.
The company told the SEC that it has entered into a five-year $250 million senior secured revolving credit facility due 2021 and an $1.06 billion senior secured term loan credit facility due 2023. CBS RADIO has borrowed the full amount of the Term Loan as of YESTERDAY (10/17).
The debt is secured by substantially all of the assets held by CBS RADIO and certain of its subsidiaries; the Term Loan is at 3.5% interest plus the greater of LIBOR or 1%. The Revolving Credit Facility requires the company to maintain a maximum consolidated net secured leverage ratio of 4 to 1 (4.5 to 1 on a temporary basis in connection with certain permitted acquisitions).
In addition, on MONDAY, the company issued $400 million aggregate principal amount of 7.250% senior notes due 2024, guaranteed on a senior unsecured basis by guarantors but bit by CBS CORP. The bonds may be redeemed by CBS RADIO any time on or after NOVEMBER 1st, 2019; it may, in addition, redeem up to 35% of the notes before that date with the proceeds of certain equity offerings.