Crown Media Holdings was able to close a $285 million acquisition credit despite a tough market because the company's target, Hallmark's video library, is well regarded by lenders. Bill Aliber, cfo, says the company began discussions with Hallmark last November and just recently closed the deal as available credit in the bank debt market tightened. "Hallmark helped us move up the food chain," said Aliber, explaining it was a lengthy negotiations process even with the Hallmark name. "The bank market became difficult, so it took a while," Aliber said--referring to the number of credit defaults over the last year and the resulting overall hesitation of lenders in the market. "What happened was the market got more challenging as the process went on," he said.
Due to the market's positive response to the Hallmark brand, the deal was oversubscribed by $50 million; the company was looking for $250 million originally and received $300 million in commitments. The company chose to scale back, since it didn't need the full amount. Crown Media sought out Hallmark because of its name recognition and its ability to give the company a steady supply of family movies.
J.P. Morgan was chosen to lead the deal after the company sought bids. Aliber said J.P. Morgan won based on its experience leading media credits. "They have good overall knowledge of our business, and they spoke eloquently to the other banks," he said. Pricing is LIBOR plus 3%.