Avis loan steady with acquisition news; Nine Entertainment, NEP Broadcasting deals surface

By Sara Rosenberg

New York, Jan. 2 - Avis Budget Group Inc. announced plans to acquire Zipcar Inc. and use incremental debt for the bulk of the purchase price, and with the disclosure, the company's term loan C remained fairly firm in trading.

Over in the primary, Nine Entertainment Group emerged with plans to bring a new deal to market next week, and NEP Broadcasting LLC revealed timing and structure on its buyout financing credit facility.

Avis holds firm

Avis Budget Group's term loan C was quoted at 101 bid, 101½ offered in the secondary market on Wednesday, flat to Monday's 101 bid level, despite the revelation that the company will be getting more debt for its acquisition of Zipcar.

Zipcar is being purchased for $12.25 per share in cash, representing a total transaction value of about $500 million, and a significant portion of that price is anticipated to be financed with incremental corporate debt borrowings, company officials said in a conference call.

The remaining portion of the transaction will be funded with cash on hand, officials added.

For the combined company, net corporate debt to LTM adjusted EBITDA will be 3.2 times, compared to Avis' current leverage of 2.9 times.

Closing is expected in the spring, subject to approval by Zipcar shareholders and other customary conditions.

Avis is a Parsippany, N.J.-based provider of vehicle rental services. Zipcar is a Cambridge, Mass.-based car sharing network. Following the acquisition, Zipcar will move its headquarters to Boston.

Nine Entertainment readies

Moving to the primary, Nine Entertainment is planning on hosting a bank meeting at 10:30 a.m. ET in New York on Jan. 10 to launch an A$800 million senior secured credit facility that is being led by UBS Securities LLC, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and Nomura, according to a market source.

The facility consists of an A$100 million undrawn revolver and a U.S. dollar-equivalent A$700 million seven-year covenant-light term loan, the source said, adding that price talk is not yet available.

Proceeds from the term loan will be used to pay A$600 million cash consideration to previous senior and mezzanine lenders and Red Earth, pay about A$70 million in transaction and advisory costs and for general corporate purposes.

The revolver will be available for general corporate purposes as well.

Nine Entertainment Co is an Australia-based diversified media and entertainment group.

NEP coming soon

Also on the topic of new issues, NEP Broadcasting will be holding a bank meeting on Tuesday to launch a $680 million credit facility, according to a market source.

The facility consists of a $60 million revolver, a $455 million first-lien term loan and a $165 million second-lien term loan, the source said.

Barclays, Morgan Stanley Senior Funding Inc. and GE Capital Markets Corp. are leading the first-lien debt, and Morgan Stanley and Barclays are leading the second-lien tranche.

Proceeds will be used to back the already completed purchase of the company by Crestview Partners from American Securities LLC.

NEP is a Pittsburgh-based provider of outsourced teleproduction services critical to the delivery of live sports and entertainment events.

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