(Sept 11): Formula 1 priced a US$2.55 billion (RM11.05 billion) loan package on Tuesday to help finance owner Liberty Media Corp’s acquisition of motorcycle racing association MotoGP World Championship, after investor interest led to a refinancing transaction being added to the offering.
The racing circuit initially sought an US$850 million leveraged loan for the purchase. It later added a US$1.7 billion term loan refinancing.
The loans priced two percentage points above the secured overnight financing rate and were issued at par, according to a person familiar with the matter, who asked not to be identified as they were not authorised to speak publicly. Pricing was tightened earlier on Tuesday from initial talk. The margins can be reduced by 0.25 percentage point if Formula 1’s net leverage ratio falls to certain level, the person added.
The new loan matures in September 2031, and the existing one was repriced last year at a spread of 2.25 percentage points.
There have been several instances this year, including by AssuredPartners Inc, of firms coming to market for a leveraged loan, and then subsequently adding plans to refinance or reprice other debt as financing costs have dropped.
Liberty Media declined to comment, and representatives of lead bank Goldman Sachs Group Inc did not immediately respond.
In a post-Labor Day issuance blitz, more than US$50 billion of leveraged loan deals have launched as investors take on riskier deals in a hot market with low volatility ahead of the US election. Barclays plc had projected as much as US$40 billion of launches for all of September.
Liberty Media, Formula 1’s parent company, announced in April that it would buy motorcycle racing league MotoGP from Bridgepoint and the Canada Pension Plan Investment Board. The US$3.8 billion transaction would be funded by a combination of cash and shares, with an expected close at year end. Formula 1 has seen increased popularity in the US, after the success of Netflix Inc’s documentary show Drive to Survive.
Uploaded by Tham Yek Lee