IFR Magazine – June 08, 2019

LOANS LEVERAGED LOANS

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MATUREûFUND

Vue scraps sterling term loan in refi relaunch

„ EUROPE Cinema chain pulled debt package in December

UK cinema chain VUE INTERNATIONAL has opted

for euro term loans as part of a revamped

£878m-equivalent refinancing, shunning the

sterling market following investor feedback.

This is Vue’s second attempt to tap the loan

market after it pulled a £833m-equivalent debt

package in December last year due to volatile

market conditions.

“Vue has maturities to deal with so it makes

sense to do this refinancing now,” a senior

banker said.

The refinancing comprises an approximate

£550m-equivalent euro-denominated term

loan B and a €114m delayed draw term loan B.

Shareholder OMERS will also provide £165m

second-lien PIK notes.

The first-lien loans are guided at 500bp over

Euribor with a 0% floor and a 99 OID. The deal

includes 101 soft call for six months.

Pricing is higher than the firm’s last attempt

to tap the market in December.

Vue’s first refinancing attempt comprised a

£300m TLB guided at 500bp-525bp over Libor,

as well as a €480m term loan B and a €114m

delayed-drawn facility, guided at 425bp-450bp

over Euribor. All were offered with a 0% floor at

99 OID.

The sterling term loan has been removed

from the new structure and Vue will instead raise

euros and put currency swaps in place, banking

sources said.

Investors have been wary of sterling loans

due to uncertainty in the current economic

environment, unable to be tempted by the usual

pricing premium associated with it.

JP Morgan, Morgan Stanley and Lloyds

Bank are bookrunners on the deal, which has

corporate ratings of B3/B-.

An existing £60m equivalent super senior

revolving credit facility will also be refinanced on

a senior secured basis and increased to £65m.

Proceeds of the transaction refinances Vue’s

€120m TLB, €360m of senior secured FRNs and

£300m senior secured notes. It will also refinance

a €114m delayed draw tranche, which finances a

majority of Vue’s €130m acquisition of CineStar,

new site expansion and associated fees and

expenses. The refinancing is leverage neutral.

OMERS Private Equity and Alberta Investment

Management acquired a 74% holding in Vue for £935m

in 2013. Vue’s management owns the 26% stake.

Vue generated £220.9m in turnover in the

first quarter as end of February, 10.6% lower

than the same period of last year. LTM Ebitda

reached £110.4m with net leverage of 5.7 times,

according to the company’s website.

Claire Ruckin