Cumulus Media retreats with exchange proposal; First Data, Capsugel launch loans, extensions

By Sara Rosenberg

New York, March 22 – Cumulus Media Inc.’s term loan was noticeably weaker in trading on Tuesday following disclosure of discussions with noteholders on an exchange offer and a potential revolving credit facility amendment.

Switching to the primary market, First Data Corp. went out to lenders with a proposed incremental term loan and an amendment and extension of a portion of an existing term loan, and Capsugel Holdings US Inc. launched an add-on term loan and amendment and extension of its existing term loan as well.

Also, Travel Leaders Group LLC increased the size of its add-on term loan ahead of allocating, and Surgery Center Holdings Inc. (Surgery Partners Inc.) allocated an add-on term loan too.

Cumulus Media slides

Cumulus Media’s term loan headed lower in the secondary market on Tuesday as the company revealed in an 8-K filed with the Securities and Exchange Commission that it has recently entered into non-disclosure agreements with certain holders of its 7.75% senior notes due 2019 regarding a potential exchange transaction, according to a trader.

Post-news, the term loan was quoted at 70 bid, 72 offered, down from 72½ bid, 73½ offered, the trader said.

Under the proposal, the notes would be exchanged for up to 42.5% of the principal amount of each note in certificates, with the certificates representing interests in a trust that would hold a participation in the company’s $200 million revolver.

Lenders under the revolver would assign their commitments to a new lender.

Exchanging noteholders would also receive a pro rata share of an offering of 19.9% of the company’s pro forma outstanding common stock after taking into account such issuance and full participation of the notes in the exchange.

Cumulus Media amendment

In addition, as part of the exchange proposal, Cumulus Media would amend its revolver to extend the maturity to May 15, 2020, increase pricing to Libor plus 1,100 with a 1% Libor floor and lift the undrawn commitment fee to 5%.

Furthermore, the amendment would revise the financial covenant to permit borrowing under the revolver in connection with the exchange, require compliance with a consolidated first-lien net leverage ratio of 3.75 times for future draws and eliminate the financial maintenance covenant.

Discussions have also included the company potentially using additional capital to facilitate full participation by holders of notes in the exchange.

The company went on to say in the 8-K filing that there is no assurance that the exchange will take place on the same or similar terms to those set out above, on different terms or at all.

Cumulus Media is an Atlanta-based radio broadcaster.

First Data comes to market

Over in the primary market, First Data launched without a call a fungible incremental term loan due March 24, 2021 and an amendment and extension of a portion of its term loan due in 2018 to March 24, 2021, according to a market source.

Talk on the incremental term loan and the extended term loan is Libor plus 400 basis points with no Libor floor and an original issue discount of 99.5 to 99.75, the source said, adding that all of the company’s March 2021 term loans will get 101 soft call protection for six months.

Proceeds from the incremental term loan will be used to refinance a portion of the 2018 term loan.

Sizes for the incremental term loan and the portion of the 2018 term loan that is being extended are still to be determined, the source continued.

Commitments are due at 5 p.m. ET on Wednesday.

Credit Suisse Securities (USA) LLC and KKR Capital Markets are leading the deal.

First Data steady in trading

First Data’s existing term loans were unchanged in the secondary market after news hit of the incremental term loan and amendment and extension plans, a trader remarked.

The company’s 2018 term loan was quoted at 99¾ bid, 100¼ offered, its 2021 term loan was quoted at par bid, 100 3/8 offered and its 2022 term loan was quoted at 99 3/8 bid, 99 7/8 offered, all flat on the day, the trader added.

There is currently about $4.6 billion outstanding under the company’s 2018 term loan, but that amount is expected to be reduced to about $3.7 billion after planned prepayments from the proceeds of a recently priced $900 million 5% senior secured notes offering.

First Data is an Atlanta-based provider of payment processing solutions.

Capsugel holds call

Capsugel hosted a lender call at 10:30 a.m. ET on Tuesday to launch a $200 million add-on first-lien term loan due July 2021 and an amended and extended term loan due July 2021 with talk of Libor plus 300 bps with a 1% Libor floor and 101 soft call protection for six months, a market source said.

The new money is offered at an original issue discount of 99.75, and lenders are being offered a 25-bps consent fee for the amendment, the source said.

The existing term loan is being extended from 2018 and pricing is increasing from the current rate of Libor plus 250 bps with a 1% Libor floor.

Commitments are due at 2 p.m. ET on Thursday, the source added.

UBS AG is leading the deal.

Proceeds from the add-on term loan will be used to repay a portion of the company’s HoldCo PIK notes.

Capsugel is a Morristown, N.J.-based manufacturer of hard capsules and drug-delivery systems.

Travel Leaders upsizes

In more happenings, Travel Leaders Group lifted its fungible add-on term loan (B+) due December 2020 to $30 million from $25 million and left pricing at Libor plus 600 bps with a 1% Libor floor and an original issue discount of 98.75, a source remarked.

The spread and floor on the add-on term loan matches existing term loan pricing.

Allocations went out on Tuesday, the source added.

UBS AG is leading the debt that will be used to add liquidity for potential acquisitions.

Travel Leaders is a Plymouth, Minn.-based travel agency company.

Surgery Center allocates

Surgery Center allocated its $80 million incremental covenant-light first-lien term loan due Nov. 3, 2020 that is priced at Libor plus 425 bps with a 1% Libor floor, in line with the existing first-lien term loan due Nov. 3, 2020, and was sold at an original issue discount of 98, according to a market source.

All of the first-lien term debt is getting 101 soft call protection for six months.

Jefferies Finance LLC is leading the loan that will be used to fund two acquisitions.

Surgery Center is a Nashville, Tenn.-based healthcare services company.

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