Like many other companies right now, Cumulus is riding the refinancing wave, issuing loans to lower interest costs. Proceeds will refinance the company’s current first- and second-lien loans. The details: Cumulus is floating a $200 million, five-year revolver and a $2.025 billion, seven-year first-lien term loan. The company set pricing of LIB+325-350, with a 1% Libor floor. The second-lien term loan pays LIB+600 with a 1.5 percent Libor floor.
On 9/30, Cumulus had $1.24 billion outstanding on its first-lien term loan due September 2018, and $785.5 million out on its second-lien term loan due September 2019, notes a Reuters story.
JP Morgan lead the deal.
“Cumulus is back after repricing its first-lien term loan a year ago. With this proposed transaction, the company is trying to lower costs on its first-lien loans and taking out higher-cost second-lien loans,” noted the story.
“It’s a meaningful improvement in their annual debt service. They will save upwards of $30-35 million in interest costs which adds nicely to their free cash flow generation,” Carl Salas, vice president and senior credit officer at Moody’s Investors Services, told Reuters.
Moody’s affirmed Cumulus’ B2 corporate family rating and assigned a B1 rating to the new $2.025 billion first-lien term loan.