Banks sweeten ProSieben Sat1 €1.25bn financing

Bankers say Europe’s leveraged loan market is demonstrating maturity as JPMorgan and Deutsche Bank, bookrunners on the financing for German Media Partners, reach compromise with investors to get deal off the blocks.

JPMorgan, Deutsche Bank, joint bookrunners, and Lehman Brothers have added an extra percentage point on the yield of the €1.25 billion ($1.56 billion) financing for German Media Partners, the private equity consortium behind ProSiebenSat.1, a German broadcaster.
The banks hope to encourage investors to back the refinancing, which one banker on the deal described as highly structured, by compromising on the pricing of the €1.2 billion term loan and a €50 million revolver.
At launch, the loan was priced at 300 basis points above Euribor, the European interbank lending rate. The new offer is 400 basis points above Euribor. In addition they are proposing 50 basis points up front, pricing the loan at a discount, and have cut the maturity of the term loan, according to a report from Standard & Poor’s, a rating agency.
Another banker said: “From an investor point of view it is a margin loan product and should be priced as such. We are of the view it has more backing than a margin loan. The improved yield is our compromise on this view.”
The increased margin offered to investors is unusual for the European market, which bankers say is more used to price cuts, driven by high demand for paper from institutional investors.
The German Media loan will remain the same size and be used to pay a dividend to the consortium members including: Haim Saban, Alpine Equity Partners, Bain, Hellman & Friedman, Providence, Putnam, Quadrangle and Thomas H. Lee.
Axel Springer was lined up to buy ProSiebenSat.1 this year, but the sale was blocked by the competition authorities.