Formula One cross-border loan sees hefty oversubscription

April 12 (RLPC) - Formula One's recap loan is three times oversubscribed in the US ahead of today's end-of-day commitment deadline in New York, buyside sources told Thomson Reuters LPC.

The loan, which is structured as an amend and extend transaction as well as a refinancing, is said to have seen successful syndication in both the US and Europe. Goldman Sachs and RBS lead the cross-border loan on a best efforts basis.

Accounts in Formula One's existing term loan B have the option to do a cashless roll into the deal, according to sources. The company is also looking to raise around $417 million of new money debt, sources said.

"All existing lenders want back in and (want) more exposure, so for new accounts, allocations will be horrific," said a US buyside source looking at the deal.

The $2.2 billion loan will include a $70 million revolver due 2017, a new $1.38 billion term loan B due 2017, a new $817.5 million term loan C due 2018.

Pricing on the TLB, which existing accounts can roll into, is guided at 500 basis points over Libor with a 1.25 percent Libor floor and a discount of 99 cents on the dollar. But that rate is expected to be slashed given the success of the deal, sources said.

The TLC is believed to be already placed, according to sources.

Formula One proposes to use the funds as follows: $1.784 billion to repay existing bank debt due 2012-14, $1.06 billion to issue a dividend, $46 million to put cash on the balance sheet and another $46 million in estimated fees and expenses.

As part of the dividend recap, the refinancing will allow Formula One's shareholders, including majority owner CVC Capital , to transfer around $1 billion of cash to holding company Delta Topco for a range of purposes, including dividends and acquisitions.

CVC Capital bought Formula One in April 2006, backed by $2.1 billion of debt. In 2007, the debt was recapitalized with $2.92 billion of debt consisting of an $800 million term loan A at 200bp over Libor, a $1.4 billion term loan B at 237.5bp over Libor, a $70 million revolving credit at 200bp over Libor and a $650 million second-lien loan at 350bp over Libor.

(Smita Madhur is a senior writer for Thomson Reuters Loan Pricing Corps in New York. Isabell Witt is a correspondent for Thomson RLPC in London)