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Refinance: First Leisure

First Leisure’s GBP95 million loan facility is still in syndication, with no firm closing date in sight despite the fact that the deal was initially slated to close at the end of July, via mandated lead arranger Scotia Capital. The UK night club operator mandated Scotia Capital back in May to arrange the loan, which refinances a GBP180 million financing, which backed the 1999 management buyout of the group. Scotia Capital is thought to have funded the loan in June, together with Royal Bank of Scotland.

The transaction is split between a GBP55 million five-year amortising term loan at 162.5bp over Libor, a GBP15 million five-year revolving credit at 162.5bp and a GBP25 million five-year term loan at 187.5bp. The margin on all three tranches ratchets in line with the borrower’s net debt to EBITDA ratio. Senior and total debt to EBITDA stands at 2.78x and cannot rise to more than 3x. On the original facility, total debt to EBITDA was 4x, while senior debt was 3.1x.

The EURO366 million MBO was backed by Candover and the group has since sold its bars division for EURO107 million and further deleveraged by a EURO122 million sale and leaseback. First Leisure is a leader in the UK night club industry, operating 45 large capacity venues throughout the UK with annual sales of over GBP85 million.