CEC launches $725 million term loan at Libor plus 325-350 bps

By Sara Rosenberg

New York, Feb. 4 - CEC Entertainment Inc. launched on Tuesday its $725 million seven-year covenant-light term loan B with price talk of Libor plus 325 basis points to 350 bps with a 1% Libor floor and an original issue discount of 991/2, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

The company's $875 million credit facility (B) also includes a $150 million five-year revolver.

Commitments are due on Feb. 13, the source added.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc. and UBS Securities LLC are the lead banks on the debt.

Proceeds will be used to help fund the buyout of the company by Apollo Global Management LLC for $54.00 per share in a transaction valued at about $1.3 billion, including the assumption of debt.

Other funds for the transaction are expected to come from $335 million of equity and $305 million of senior notes.

The notes are backed by a commitment for a $305 million one-year bridge loan that is priced at Libor plus 675 bps, stepping up by 50 bps every three months. The debt has a 1% Libor floor.

Closing is subject to a minimum tender condition of more than 50% of the company's common shares, the receipt of the Federal Trade Commission's approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.

CEC is an Irving, Texas-based operator of Chuck E. Cheese's family dining and entertainment stores.

© 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.