19X details $650 million credit facility for CKX purchase

By Sara Rosenberg

New York, Nov. 20 - 19X Inc. detailed its financing package for the acquisition of CKX Inc., including plans for a new $650 million credit facility, according to an 8-K filed with the Securities and Exchange Commission Tuesday.

Credit Suisse and Deutsche Bank are the joint bookrunners and joint lead arrangers on the deal, with Credit Suisse the administrative agent.

The facility consists of a $50 million 41/2-year revolver expected at Libor plus 450 basis points, with a 75 bps commitment fee, a $400 million five-year first-lien term loan expected at Libor plus 450 bps and a $200 million 51/2-year second-lien term loan expected at Libor plus 750 bps.

The first- and second-lien term loans are expected to be sold at an original issue discount of 97.

The second-lien term loan has call protection of 103 in year one, 102 in year two and 101 in year three.

The commitment for the second-lien term loan is a commercially reasonable efforts commitment, the filing said.

Financial covenants under the revolver and first-lien term loan include maximum ratios of total debt to EBITDA, maximum ratios of first-lien secured debt to EBITDA and minimum interest coverage ratios.

Financial covenants under the second-lien loan will be substantially similar to those contained in the first-lien facilities, but at wider levels.

19X is buying CKX for $13.75 per share in cash minus a percentage of an incremental increase in value currently being received by shareholders. The maximum adjustment will not exceed $2.00 per share.

19X is a private company owned and controlled by Robert F.X. Sillerman, chairman and chief executive officer of CKX, and Simon R. Fuller, a director of CKX and the CEO of 19 Entertainment Ltd., a CKX subsidiary. CKX is a New York-based company engaged in the ownership, development and commercial use of entertainment content.

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