Credit Suisse and Goldman Sachs are in the market with a $250 million senior secured credit facility for the leveraged buyout of MediMedia. Syndication of the deal launched last Tuesday. The credit comprises a six-year, $50 million revolver and a seven-year, $200 million term loan. Price talk is LIBOR plus 2 1/2-2 3/4% on both tranches, according to an investor.
The credit will be used to take out a bridge loan set up to partially finance Vestar Capital Management's approximately $611 million acquisition of the Chatham, N.J.company from Cinven, The Carlyle Group and Apax Partners. There is also $150 million of senior subordinated notes due 2014.
Moody's Investors Service rated the new credit Ba3 with a LGD 2. The ratings agency noted that pro forma the new debt, the company's leverage would be 8.6 times. Moody's expects the company to use its free cash flow to decrease debt and ultimately lower debt leverage to around 7.4 times by the end of 2007. A spokeswoman for the company declined comment.