ALM, previously known as American Lawyer Media, is using the liquid loan market to recapitalize the business and pare interest costs. Eric Lumberg, cfo of the New-York based media company that is owned by U.S. Equity Partners, a fund sponsored by Wasserstein & Co., said ALM decided to take out the loan because it "seems like the opportune time." He declined further comment.
Syndication was launched Feb. 15 with Credit Suisse First Boston and UBS as the joint lead arrangers. GE Capital Corp is the administration agent. The loan comprises a five-year, $70 million revolver, priced at LIBOR plus 2 1/2%, with 50 basis points on the undrawn. There is also a five-year, $196 million first lien "B" loan at LIBOR plus 2 3/4% and a $78.5 million, six year second-lien term loan. The second lien is offered at LIBOR plus 6% and has 102, 101 call protection. Latham & Watkins is counsel to the agent and the arrangers.
Moody's Investors Service assigned a B3 rating to the first lien debt and Caa1 to the second lien. The company is also issuing $25 million in unrated holding company preferred stock. Leverage will remain unchanged at 8.5 times through the holdco notes.
The overall transaction will refinance existing debt, consisting of $175 million of 9 3/4% senior notes and $63 million of 12 1/4% discount notes. This will save ALM approximately $10 million in annual cash interest payments and push out maturities three years to 2010.
CSFB had been working on a couple of acquisitions with U.S. Equity Partners, said a banker. The two groups were in fairly constant dialogue about capital structure and acquisitions before this deal took place, he said. ALM, which produces 35 national and regional publications, acquired conference producer Insight Information Co. this month. Calls to various representatives of the sponsors were not returned.