Endemol Restarts Hung LBO Loan Sale

LONDON May 15 (Reuters) – Television production company Endemol's management will meet investors in London and New York next week to assess investor interest in buying the company's 2.2 billion euro buyout loan, senior bankers close to the deal said on Wednesday.

The loan forms part of Europe's $116 billion pipeline of unsold leveraged loans that were stranded by the credit crunch in mid 2007, according to Reuters Loan Pricing Corp data. They are now being revisited after an improvement in secondary market prices, including Alliance Boots' 9.02 billion pounds loan.

Endemol EML.AS is seeking to take advantage of interest from US investors, which currently have fewer opportunities to consider as the US market has made faster progress on selling its pipeline of hung leveraged loans.

Endemol is a global business with substantial US assets including Endemol USA, and $525 million of the loan is denominated in dollars.

Endemol will hold investor meetings in New York on May 20th and in London on May 21st and 22nd with a view to selling down the first lien, second lien and mezzanine debt, bankers said.

“We are soliciting interest on all parts of the capital structure with a view to assessing the level of interest by the end of the month,” a banker close to the deal said.

The loan backed Endemol's 3.6 billion euro purchase last May by a group of investors in May 2007, including Mediaset, Jon de Mol's investment firm Cyrte and the investment arm of Goldman Sachs.

The consortium's equity contribution of 1.4 billion euros represented 40 percent of the capital structure and a purchase multiple of 14 times, bankers said. 

The loan was launched to Endemol's relationship banks in August 2007. A small bit of the debt was sold at that time, but the deal was withdrawn from syndication as market conditions deteriorated.

The loan is being shown to the market in its original form, but the split debt structure has been simplified as the debt was pushed down to the operating company from the holding company following the completion of the acquisition.

“The structure is easier to fathom now that the debt is closer to the cashflow,” a banker close to the deal said.

Endemol has been performing according to its business plan, bankers close to the deal said, but the loan is unlikely to fetch face value as it has high leverage ratios of 6.2 times through the first lien loan and 8.5 times total debt.

The lead banks have a co-ordination agreement around the sale of the loan, sources said. Investors' indications of interest will be shown to all banks, which will then take individual decisions to sell or not.

Endemol produces popular game-shows and reality television programmes including “Big Brother”, “Fear Factor”, “Who Wants to be a Millionaire?” and “Deal or No Deal” and is also active in the scripted entertainment and digital media markets.

(Reporting by Tessa Walsh; editing by Elaine Hardcastle)