US cableco Charter Communications (NASDAQ:CHTR) has entered into two term loans totalling US$3.8bn to help fund its purchases of Time Warner Cable (NYSE:TWC) and Bright House Networks.
The US$1bn term loan H senior secured credit facility and US$2.8bn term loan I senior secured credit facility come under an amended and restated credit agreement, which provides for up to US$3.8bn of term loans.
The final maturity date for the US$1bn loan is 24 August 2021 and, for the US$2.8bn loan, 24 January 2023.
Pricing for the US$1bn loan was set at Libor plus 250bps, with a 75bps Libor floor. For the US$2.8bn loan, it was set at Libor plus 275bps, with a 75bps Libor floor. Both loans were issued with 0.25% of original issue discount.
Joint lead arrangers and bookrunners for the new facilities were BofA Merrill Lynch, Credit Suisse, Goldman Sachs, Deutsche Bank and UBS.
The proceeds from the new loans have been placed in escrow continent upon the TWC deal closing. There is no contingency for completing the Bright House acquisition. Charter aims to close both deals by the end of this year.
Last month, Charter netted US$15.5bn of high-yield debt in a senior secured bond offering to help fund the acquisitions of TWC and Bright House for US$56bn and US$10.4bn respectively. In late July, Moody’s assigned a Ba1 rating to the then-proposed term loan H, saying it would rank pari passu with the new senior secured notes.
