Rainbow gets $800 million credit facility

By Sara Rosenberg

New York, July 10 - Rainbow National Services LLC closed on a new $800 million senior secured credit facility, according to an 8-K filed with the Securities and Exchange Commission Monday.

JPMorgan and Bank of America acted as joint lead arrangers and bookrunners on the deal, with JPMorgan also administrative agent and Bank of America syndication agent. Credit Suisse, Citigroup and Wachovia acted as co-documentation agents.

The facility consists of a $500 million term loan A due June 30, 2013 and a $300 million revolver due June 30, 2012, with both tranches initially priced at Libor plus 125 basis points. The facility contains a pricing grid that ranges from Libor plus 100 to 150 bps based on the company's cash flow ratio.

Proceeds from the new deal, which closed on July 5, were used to refinance the company's existing credit facility that consisted of a $600 million term loan and a $350 million revolver.

Covenants include a limitation on the incurrence of additional indebtedness based upon a maximum ratio of total indebtedness to cash flow of 6.75:1, decreasing to 6.25:1 on and after July 1, 2008, a maximum ratio of senior secured debt to cash flow of 5.5:1 and a minimum ratio of cash flow to interest expense of 1.75:1.

Rainbow is a Jericho, N.Y., owner of cable channels.

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