Primedia closed a $1 billion credit facility in late June, replacing a seven-year facility. Jim Magrone, senior v.p. of investor relations, said the company pursued the new deal now because of favorable market conditions. "Among the considerations for the new bank facility was the company's desire to extend the amortization schedule out in time, the fact that interest rates are very favorable and bank debt is available, and to provide additional liquidity," he said. He declined to explain any changes to the covenants or pricing on the new deal.
The deal breaks down into a $475 million, seven-year revolver, a $100 million seven-year term loan, and an eight-year $425 million term loan. Magrone said the facility refinances existing bank debt. "We were in the fifth year of a seven-year bank facility. It was important for the facility to reflect the current business parameters of the company," he explained. In conjunction with the new bank deal, the company sold $500 million of 10-year notes to the public in May. Primedia, based in New York City, publishes 200 consumer and trade magazines including Seventeen and American Baby.
J.P. Morgan and Bank of America are the co-leads on the new facility. Magrone declined to specify if they were the past leads on the credit. "[Morgan and BofA] won based on strategy, pricing and a long history with the company," Magrone said. The deal, which was oversubscribed, has over 40 banks in the syndicate. He said the company is open to talking to interested banks for future deals. The company's EBITDA for the first quarter was $337 million. The ratio of debt to EBITDA for the first quarter is 4.97. The new deal is rated Ba3.