Central European Media gets €250.8 million three-year term facility

By Susanna Moon

Chicago, Nov. 14 – Central European Media Enterprises Ltd. obtained a €250.8 million three-year senior unsecured term credit facility on Friday, according to an 8-K filing with the Securities and Exchange Commission.

BNP Paribas Securities Corp. and Credit Agricole Corporate and Investment Bank are the joint-lead arrangers and bookrunners. BNP Paribas is the administrative agent. Time Warner Inc. is the guarantor.

Proceeds will be used to redeem the company’s €240 million principal amount of 9% senior notes due 2017, issued by CME’s wholly owned subsidiary CET 21 spol sro, and called Friday for redemption on Dec. 14.

Interest will be Libor plus 107 basis points to 190 bps, based on Time Warner’s credit ratings.

The facility will mature on Nov. 1, 2017.

CME may prepay the loans drawn under the 2017 credit agreement in whole or in part at any time from June 1, 2016 without premium or penalty.

2015 refinancing commitment letter

The 2015 refinancing commitment letter provides that Time Warner will, at its option, either (a) assist CME to arrange a senior unsecured term credit facility with one or more commercial banks selected by Time Warner and reasonably acceptable to CME that will mature on Nov. 1, 2019 and be guaranteed by Time Warner and some of its subsidiaries, or (b) provide CME a senior secured term loan that will mature on Nov. 1, 2019.

In either case, the company will provide enough funds for CME to repay at maturity the $261 million principal amount of 5% senior secured convertible notes due 2015.

Time Warner will make its election prior to Oct. 1, 2015 and CME expects to complete the financing and repay the 2015 convertibles just before their maturity on Nov. 15, 2015.

Interest on loans under the 2015 refinancing third-party credit agreement will be Libor plus a margin, and loans under the 2015 refinancing Time Warner term loan agreement will bear interest at 8.5% per year, payable in cash or in kind at the election of CME.

Reimbursement agreement

The reimbursement agreement provides that CME will reimburse Time Warner or its subsidiaries for any payments made under any guarantee or through any loan purchase right exercised by Time Warner or its affiliates in respect of the 2017 third-party credit agreement and the 2015 refinancing third-party credit agreement as well as under a guarantee provided by Time Warner and some of its subsidiaries of the interest rate hedging arrangements.

In return for the guarantee, CME will pay a guarantee fee.

Term loan and revolver amendments

CME also amended the term loan credit facility agreement with Time Warner as administrative agent.

The agreement includes a limitation on liens that may be incurred by CET 21 as well as a covenant that requires the refinancing of the 2015 convertibles.

In addition, amounts outstanding under the revolver will bear interest at adjusted LIBO rate plus 900 bps.

The remaining terms of the agreement remain substantially the same as the original term loan facility agreement dated Feb. 28, 2014.

Hamilton, Bermuda-based Central European Media provides programming in Eastern European countries, including the Czech Republic, Bulgaria, Romania, Slovakia, Slovenia and Croatia.

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