Bank of America and J.P. Morgan are looking for commitments on a $950 million credit for Rainbow National Services, a subsidiary of Cablevision Systems Corp. The deal comprises a $350 million revolver priced at LIBOR plus 2 1/2% and $600 million term loan at LIBOR plus 2 3/4%, market participants said. Leverage is more than seven times.
Proceeds from the credit and $800 million of notes will be used to make a distribution to parent company Rainbow Media Enterprises. The parent company will channel about $725 million of proceeds to Rainbow Media Holdings to repay all borrowings under the company's existing $821 million credit facility. In December, B of A and Scotia Capital were in the market with a $625 million "C" loan and amendment to the $200 million revolver for Rainbow Media Holdings (LMW, 12/15).
The rest of the proceeds will be used to invest in subsidiaries, primarily start-up satellite service Rainbow DBS. Cablevision has announced a plan to spin off Rainbow Media Enterprises later this year. Rainbow National Services operates three networks: AMC (American Movie Classics), WE: Women's Entertainment and IFC (The Independent Film Channel). Spokespeople for Cablevision, J.P. Morgan, and B of A declined comment.