CMP Susquehanna breaks in upper pars; Movie Gallery rises; United Components sets price talk

By Sara Rosenberg

New York, May 5 - In trading news Friday, CMP Susquehanna hit the secondary, with its term loan B quoted atop par, and Movie Gallery Inc.'s term loan B posted some relatively strong gains during a predominantly quiet session.

Meanwhile, in the primary, United Components Inc. came out with price talk on its term loan D as the deal was launched to investors with a Friday bank meeting.

CMP Susquehanna's credit facility freed for trading during Friday's market hours, with its $700 million term loan seen quoted at par 5/8 bid, par 7/8 offered, according to a trader.

The term loan is priced with an interest rate of Libor plus 200 basis points. During syndication, the tranche was upsized from $650 million to compensate for a $50 million downsizing in the company's bond offering and pricing was trimmed from original talk at launch of Libor plus 225 basis points.

CMP Susquehanna's $800 million credit facility (B1/B-) also contains a $100 million revolver with an interest rate of Libor plus 225 basis points.

In connection with the CMP Susquehanna deal, CMP KC LLC (Stick LLC) got a new $98 million credit facility (Caa1/CCC+) that is secured by airwaves. This transaction consists of a $26 million revolver and a $72 million term loan B, with both tranches priced at Libor plus 400 basis points.

Deutsche Bank and Merrill Lynch acted as the lead banks on both credit facilities, with Deutsche the left lead.

Proceeds from the credit facilities, CMP Susquehanna's $225 million bonds and a $50 million proceeds senior discount notes offering by CMP Radio Holdings Corp. were used to help fund Cumulus Media Partners LLC's acquisition of the radio broadcasting business of Susquehanna Pfaltzgraff Co. for about $1.2 billion, which was completed on Friday.

Cumulus Media Partners was formed by Cumulus Media Inc., Bain Capital, The Blackstone Group and Thomas H. Lee Partner.

Atlanta-based Cumulus Media is the second-largest radio company in the United States, and York, Pa.-based Susquehanna Radio is the largest privately owned radio broadcasting company in the United States.

Movie Gallery trades up

Movie Gallery's term loan B was noticeably stronger on Friday, with no particular news seen sparking the movement, other than possible optimism over the company's upcoming first-quarter financial results, according to a trader.

The term loan B closed the day quoted at 93½ bid, 95 offered, up by about a half a point to a full point, the trader said.

The Dothan, Ala.-based movie rental company is scheduled to announce its first-quarter numbers on Thursday.

Some market players are feeling good about the results they might hear, especially given the recent positive earnings announcement released by both Netflix Inc. and Blockbuster Inc., which in turn is creating a better feel to the loan paper.

United Components spread talk

Moving to the primary, opening price talk of Libor plus 225 basis points surfaced on United Components' $330 million term loan D due June 2012 (B2/BB-) as general syndication on the deal officially kicked off Friday with the holding of a morning bank meeting, according to a market source.

Lehman Brothers Inc. and J.P. Morgan Securities Inc. are joint lead arrangers and joint bookrunners on the deal, with Lehman on the left. Lehman Commercial Paper Inc. is the administrative agent.

Amortization on the term loan D is 0.25% quarterly with the remaining balance due in four even installments in the final year.

Security is a perfected first-priority interest in all of the company's and its subsidiaries' tangible and intangible assets, 100% of the company's capital stock and two-thirds of the capital stock of foreign subsidiaries.

Proceeds from the new term loan D will be used to help finance the approximately $154.7 million acquisition of ASC Industries Inc. and to repay United Components' existing $217 million term loan C.

The company has an existing $75 million revolver that will stay in place as is.

Completion of the acquisition, which was announced in March, is subject to regulatory approval and other customary closing conditions.

For the last 12 months ended March 31, United Components had net sales of $1.041 billion and adjusted EBITDA of $119.8 million. And, for the last 12 months ended March 31, ASC generated net sales of $106.6 million and adjusted EBITDA of $16.2 million. So, on a pro forma basis, the combined company will have last-12-month net sales of $1.148 billion and adjusted EBITDA of $138.1 million.

Credit statistics on a pro forma basis for the combined company include senior debt to adjusted EBITDA of 2.45x, net debt to adjusted EBITDA of 3.92x, total debt to adjusted EBITDA of 4.11x and adjusted EBITDA to cash interest of 2.92x.

By comparison, United Components' credit statistics prior to the acquisition included senior debt to adjusted EBITDA of 1.81x, net debt to adjusted EBITDA of 3.36x, total debt to adjusted EBITDA of 3.73x and adjusted EBITDA to cash interest of 3.43x.

United Components is an Evansville, Ind., auto parts manufacturer. ASC is a North Canton, Ohio, automotive water pump manufacturer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.