Pricing on the deal for Rainbow Media Holdings is being recirculated to investors after the credit was oversubscribed. Investors jumped onboard despite concerns over accounting irregularities. The $625 million "C" loan was being offered at LIBOR plus 23/4%, but is now out at LIBOR plus 21/4%, said a banker. "We fully expect the book will get circled there," a banker said. In addition, the facility was upsized from $575 million. Bank of America and Scotia Capital are leading the facility that refinances debt and will fund investment in the Rainbow DBS Satellite division.
One buysider said he dropped out because he had issues with Cablevision Systems Corp., the majority owner of Rainbow Media. Cablevision is under a Securities and Exchange Commission investigation for accounting irregularities. Management has restated results for 2003. A Cablevision spokesman declined comment. According to media reports, Rainbow Media has been conducting an internal probe since July, when it fired 14 employees, including the high profile president of its AMC channel.
In addition to the "C" loan, the company's $200 million revolver was amended to permit some restructuring. There was no change in pricing on the revolver. B of A bankers did not return phone calls and a Scotia banker declined comment.