Dolan Family gets commitment for $2.8 billion loan, $4.25 billion bonds for proposed Cablevision buyout

By Sara Rosenberg

New York, June 20 - The Dolan Family Group received a commitment for a $2.8 billion senior secured credit facility at the operating company level and plans on issuing $4.25 billion in a multi-tranche bond offering at the holding company level if its proposal to take Cablevision Systems Corp. private is approved, according to a commitment letter filed with the Securities and Exchange Commission Monday.

Bank of America and Merrill Lynch will act as joint lead arrangers and joint bookrunners on the credit facility, with Bank of America the administrative agent.

The operating company credit facility will consist of a $600 million six-year term loan A, a $1.7 billion seven-year term loan B and a $500 million revolving credit facility, the commitment letter said.

Security for credit facility borrowings will be all of the capital stock of each of the borrower's domestic direct and indirect subsidiaries and 65% of the capital stock of non-domestic subsidiaries.

The holding company bonds will be a combination of unsecured senior fixed- and floating-rate notes with a minimum tenor of eight years, the commitment letter added.

As a back-up to the bond offering the company has received a commitment for a $4.25 billion one-year unsecured senior interim loan.

Merrill Lynch and Bank of America are joint lead arrangers and joint bookrunners on the bridge loan, with Merrill Lynch the administrative agent.

Proceeds from the credit facility and the bonds will be used to refinance about $1.353 billion of Cablevision debt and fund the approximately $5 billion "going private" purchase price.

The revolver is only expected to have about $11 million drawn at closing, with the rest available for working capital and general corporate purposes.

The debt commitments expire on March 31, 2006.

Under the proposal, The Dolan Family Group has offered Cablevision shareholders $21.00 per share in cash and Rainbow Media Holdings would be spun off to all Cablevision shareholders on a pro rata basis with an estimated value of $12.50 per share.

The transaction delivers an estimated value of $33.50 per share or a total of $7.9 billion to public shareholders, and implies an enterprise value for the company's telecom and cable businesses of $13.6 billion.

After the completion of the transactions, the Dolan Family Group would own 100% of the Bethpage, N.Y.-based Cablevision telecom and cable businesses and about 20% of Rainbow.

A definitive agreement on the proposed purchase has not yet been reached.

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