Syndication of Cinram International's $1.2 billion credit was launched last week with lenders oversubscribing the $300 million pro rata tranches, according to a banker. Bank One, Société Générale and GE Capital all came in at the agent level to join the Citigroup and Merrill Lynch-led deal, the banker said. The credit backs the DVD, CD, videotape and audio cassette manufacturer's $1.05 billion acquisition of the DVD and CD manufacturing businesses from AOL Time Warner (see Credit in Focus, page 9). A Merrill official declined to comment, while a Citi banker did not return calls.
The deal includes a $900 million "B" loan that is being offered at par and priced at LIBOR plus 31/4%, the banker stated. The institutional piece was drawing commitments last week, but he did not cite specific subscription levels. The pro rata is divided into a $150 million revolver and a $150 million "A" loan, both priced at LIBOR plus 3%. There is a 75 basis point commitment fee for lenders to the pro rata at a $15 million tier, with $7.5 million committed to the revolver and the same amount committed to the "A" loan, he noted.
Assets being acquired by Cinram include manufacturing facilities in the U.S. and Germany as well as other U.S. and European distribution facilities. Cinram will also acquire through the transaction Ivy Hill Corp., a packaging and printing services provider for DVDs and CDs of AOL-affiliated companies and third parties, and Giant Merchandising, an entity engaged in entertainment merchandising, retail licenses and private label marketing and distribution. Lewis Ritchie, cfo of Toronto-based Cinram, did not return calls.