Société Générale is shopping an $80 million credit for Minnesota Sports & Entertainment, the owner of the National Hockey League's Minnesota Wild. The deal comprises a $65 million senior secured facility, secured by the assets of the team, including the franchise itself, and a $15 million senior unsecured facility at the holding company level. A combination of opportunities led the company to pursue the deal, according to Pam Wheelock, cfo and senior v.p. "It's a great market right now and we've had great performance," she said.
The team facilities break out as a five-year, $30 million revolver and a five-year, $35 million term loan. Drawn pricing on the revolver and term loan will be LIBOR plus 23/4% with undrawn pricing of 50 basis points. The five-year, $15 million unsecured holding company term loan is priced at LIBOR plus 41/2%. The Detroit Red Wings are also said to be in the market refinancing $65 million in credit facilities. Pricing on this facility is said to be at LIBOR plus 21/4% but further details could not be determined.
The Minnesota facility will be used to refinance existing debt and working capital, a banker said. A mixture of institutional investors and traditional banks will be invited to invest in the facility, he added. The growth of institutional investors in the loan market is being reflected in sports deals. In 1999 there were only 37 investors in sports deals, while earlier this year the number was reported to be approximately 120.
Minnesota was awarded a franchise in 1997 and began play in 2000. A facility was in place when the team was formed but the company is now looking to get a more franchise-based facility, a banker said. The company has an existing line led by BMO Nesbitt Burns, comprised of an $80 million senior facility and $7.5 million of subordinated notes. Wheelock chose not to comment on the reasoning for the bank switch. A representative from BMO declined comment.