Chemical Group Lends $9B to TIme Warner as Industry Rides Wave of Mergers in Media

By Dunaief, Daniel | American Banker, May 3, 1995 | Go to article overview

Chemical Group Lends $9B to TIme Warner as Industry Rides Wave of Mergers in Media


Dunaief, Daniel, American Banker


The new $9 billion loan for Time Warner Inc. and its cable subsidiaries underscores the banking industry's growing involvement in the rapidly changing media sector.

The loan, led by Chemical Banking Corp. and supported by managing agents BankAmerica Corp., Bank of New York Co., and J.P. Morgan & Co., will refinance $5 billion of bank debt, replace about $3 billion of public and private debt from three cable acquisitions, and provide some working capital.

It is one of a growing number of media-related deals that have attracted bank financing lately. In fact, a $550 million facility that would enable Time Warner to shed 51% of its Six Flags amusement park business is also expected to come to market this month.

Time Warner's use of the $9 billion bank loan in connection with its recent acquisitions reflects the appeal of the bank loan market as cable companies bolster their competitive positions.

Cable companies have shown a strong appetite for acquisitions in the last year, as they continue to develop regions of subscriber strength and prepare to compete with telephone companies. Time Warner's recent acquisitions are Cablevision Industries, KBLCOM Inc., and Summit Communication Group Inc.

"Cable companies have always applauded the benefits of clustering," said Peter Smith, a managing director at Canadian Imperial Bank of Commerce, one of the larger cable lenders.

Now, said Mr. Smith, cable companies are seeking to grow to the same size as the Baby Bells.

Bankers, for their part, recognize that the fittest cable companies in the battle with telephone companies for growth and survival will most likely be the largest.

"Generally speaking, this will be a clash of the titans," said Mr. Smith. "There is very little place for small entrepreneurial cable companies."

The acquisitive cable companies have turned to the flexible financing available in bank loans in their quest for critical competitive mass. Time Warner has secured an extra measure of borrower flexibility in its new loan.

Three Time Warner affiliates could draw on the loan, with pricing and covenants varying according to the borrower.

Time Warner Inc., the parent company, which is rated BBB-minus by Standard & Poor's Corp., can draw on the entire five-year revolving credit at a price of 50 basis points over the London interbank offered rate, with a 20-basis-point commitment fee.

Time Warner Entertainment can borrow up to $4 billion at Libor plus 87.5 basis points, with a 35-basis-point commitment fee, and Time Warner Advanced Newhouse can borrow up to $5 billion at Libor plus 50 basis points, with a 20-basis-point commitment fee. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Chemical Group Lends $9B to TIme Warner as Industry Rides Wave of Mergers in Media
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.