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Kabel Deutschland: Lenders OK loan amendment to allow for new debt
By Sara Rosenberg
New York, Nov. 15 - Kabel Deutschland GmbH received lender approval of an amendment to the company's credit facility that gives increased flexibility to incur new senior debt, redeem junior debt and pay dividends, according to a news release.
Specifically, the amendment would set the secured maintenance covenant at 3.5 times until maturity and remove the 0.5 times covenant step-up following a major acquisition, thereby allowing new secured tranches to be raised for general corporate purposes in addition to existing carve outs.
In addition, the amendment would increase the company's total net debt leverage threshold for unlimited dividend flexibility to 3.5 times from 3.0 times.
Also, the current limit and required 1:1 ratio of junior and senior debt prepayment would be removed, providing the ability to upstream cash to repay junior debt subject only to covenant compliance.
Consenting to the amendment effectively provides a margin uplift of 25 basis points, since without the amendment senior leverage is expected to fall below 2.0 times early in fiscal year 2012, triggering a margin step down to Libor plus 325 bps.
By last Friday, 94% of lenders had approved the amendment, exceeding the 67% that was required.
Also, the company is looking to extend its term loan A and revolver to March 2014 from March 2012 in return for a fee of 25 bps and a margin increase to Libor plus 350 bps.
As of last Friday, the company had received commitments to extend about €195 million of the term loan A and revolver debt.
Lenders still have until this Friday to provide responses to the amendment and extension transaction.
The amendment fee being offered is 50 bps for early responses, which were due by last Friday, dropping to 25 bps following the early-bird deadline.
Kabel Deutschland is an Unterfoehring, Germany-based cable network operator.
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