Internet Brands launches $4.8B 1st-lien term loan; commitments due Nov. 18

Internet Brands Inc. has launched a $4.805 billion first-lien term loan to refinance its existing first-lien debt and to fund a shareholder distribution, according to sources. Commitments are due by 5 p.m. ET on Thursday, Nov. 18.

Price talk for the covenant-lite term loan due August 2028 is L+375, with a 0.50% Libor floor and an original issue discount of 99.5. That works out to a yield to maturity of 4.41%. Lenders are offered six months of 101 soft call protection.

The deal comes via an arranger group led by Credit Suisse, KKR Capital Markets, RBC Capital Markets, Macquarie and Mizuho.

First-lien facility ratings are B/B2, with a 3 recovery rating from S&P Global Ratings. Corporate ratings are B/B3, with stable outlooks. MH Sub I LLC and WebMD Health Corp. are the borrowers.

Proceeds from the deal will be used to refinance the company's existing first-lien facilities, including upsizing its revolver to $300 million and funding a sponsor dividend of up to $1 billion, according to Ratings. The issuer's original first-lien term loan due September 2024 was issued in 2017 to finance the acquisition of WebMD Health. Pricing came at L+375, with a 0% floor, and with a 25-basis-point margin step-down at 4.25x net first-lien leverage. The company then placed in June 2020 a $500 million non-fungible incremental first-lien term loan due September 2024 (L+375, 1% floor) to repay its revolver, and subsequently tacked on another $400 million in November 2020 and $450 million in February.

In addition to its first-lien debt, the company has a $575 million second-lien term loan due 2029 (L+625, 0% floor) that was issued in February to refinance the existing second-lien tranche. RBC Capital Markets is administrative agent on the second-lien tranche.

KKR-backed Internet Brands operates branded websites and provides vertical software products and services, primarily in the automotive, health, legal and home/travel markets.