CEC Entertainment increases term loan size to $760 million

By Sara Rosenberg

New York, Feb. 13 - CEC Entertainment Inc. upsized its seven-year covenant-light term loan B to $760 million from $725 million, according to market sources.

The term loan is talked at Libor plus 325 basis points to 350 bps with a 1% Libor floor, an original issue discount of 99½ and 101 soft call protection for six months.

The company's now $910 million credit facility (B1/B), up from $875 million, also includes a $150 million five-year revolver.

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 will come from $255 million of bonds, downsized from $305 million with the term loan upsizing, and equity.

Sources explained that the company has $15 million more in cash on hand at close, so it was able to reduce its total amount of debt by $15 million.

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.

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