AOL gets $250 million five-year revolving loans at Libor plus 200 bps

By Susanna Moon

Chicago, July 8 - AOL Inc. obtained a $250 million five-year senior secured revolving credit facility on July 1 led by JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the loans is Libor plus 200 basis points. There is an unused fee, which was not specified in the SEC filing.

The facility is secured by substantially all the assets of AOL and its material domestic subsidiaries and was not drawn at closing.

Under the terms, AOL may request up to an additional $250 million of commitments.

The facility matures on July 1, 2018.

The company is required to maintain a ratio of debt to consolidated EBITDA of no more than 2.75 times and a ratio of consolidated EBITDA to interest expense of no less than 3 times.

The covenants limit the company's ability to incur additional debt, grant liens, merge or consolidate with any person or sell all or substantially all of its assets to any person, dispose of its assets, make dividends and other payments on its equity, make investments, enter into transactions with affiliates, enter into hedging arrangements, make changes to its fiscal year, enter into agreements containing negative pledge clauses, enter into agreements with clauses restricting subsidiary distributions and make changes in its line of business.

Proceeds will be used for general corporate purposes.

"Today's announcement significantly strengthens AOL's capital structure and marks another step forward in our financial progress," Karen Dykstra, AOL executive vice president and chief financial officer, said in a press release.

"The oversubscribed credit facility underscores the debt market's receptiveness to AOL and significantly improves our financial flexibility to allocate capital to our strategic priorities, as well as continue our track record of returning capital to our shareholders."

AOL is a New York-based brand company.

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