The loans comprise a £70m term loan ‘A’, a £90m term loan ‘B’ and a £60m revolver. Each tranche will mature on September 30 2013.
Margins on the loans will be 400bp over Libor, and HMV will also pay an exit fee upon repayment of its term loan ‘B’, depending on the amount outstanding. The exit fee will initially accrue at 5% per annum, but will increase to 8% by April 1 2012 and 14% by January 1 2013 if the loan has not been repaid.
HMV’s lending banks will also be issued warrants representing 5% of the group’s share capital, convertible into shares at any time after June 30 2012.
HMV began discussions with lenders about amending its bank facility in March, when it said it might breach its loan covenants. In July 2010, Barclays, ING, Lloyds, Bank of Mitsubishi-UFJ, Mizuho, RBS, Santander and Svenska Handelsbanken arranged HMV’s £240m revolver, which pays 225bp over Libor and will mature in July 2013.
