Emmis Communications is in the market for a refinancing and a dividend deal from Bank of America and Deutsche Bank. Syndication of the $600 million credit facility launched last Wednesday. The deal consists of a $150 million revolver and a $450 million term loan "B." Pricing on the term loan is LIBOR plus 2 1/4%; pricing on the revolver could not be determined. The facility will be used to refinance approximately $375 million of the media firm's 6.875% senior subordinated notes and to pay a special, first-time $150 million dividend to shareholders.
Standard & Poor's rated the new facility B with a 2 recovery rating and a stable outlook based on the fact the new debt limits the company's ability to lower leverage. A banker said with the new credit it will have leverage of 6.2 times. The ratings agency also removed Indianapolis-based Emmis from CreditWatch with negative implications, where it was placed May 11, 2005.
Emmis hit up B of A, Goldman Sachs, Wachovia Securities, Deutsche Bank and Credit Suisse in mid-2004 for a $1.025 billion credit. The deal consisted of a $350 million revolver and a $675 million term loan "B," priced at LIBOR plus 2 1/4% and LIBOR plus 1 3/4%, respectively (LWM, 6/11/2004). The company used the facility, along with $375 million from a debt offering, to refinance existing debt and redeem all its outstanding 8 1/8% senior subordinated notes and repurchase its 12 1/2% senior discount notes.
Emmis is a media firm with radio broadcasting, television broadcasting and magazine publishing operations. Calls to an Emmis spokeswoman were not returned.