In-store music provider Mood Media Corp.'s bankruptcy reorganization included a $200 million exit term loan facility and $40 million in new-money term loans.
HPS Investment Partners is the administrative agent. HPS was agent under a pre-petition first-lien credit agreement. The $40 million in new money includes a roll of the debtor-in-possession facility.
Interest on the exit term loans due 2025 is L+725 points (L+925 pay-in-kind) with a 1% London interbank offered rate floor. The loan includes a 3% closing payment and 3% exit fee. Default interest is an additional 2%. The loan is non-callable in the first year, and features a prepayment premium of 3% in year two, dropping to 1% in year three, court documents show.
The loan features a leverage covenant, subject to a cap at $30 million.
The company filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston, on July 30 with a prepackaged bankruptcy plan. A judge confirmed a reorganization plan the next day.
The company had earlier filed a proceeding in 2017 under the Canadian Business Corporations Act, or CBCA, to implement restructuring, and a parallel Chapter 15 in bankruptcy court in Manhattan. Mood Media was redomiciled to Delaware, from Canada, through the reorganization.
The latest restructuring agreement cut debt by $404 million.
Pre-petition debt included a $274 million first-lien loan due 2022 dating from 2017, a $12 million supplemental first-lien term loan, a $15 million revolver, and $326 million of second-priority L+1,400 senior secured PIK notes due 2023.
First-lien lender claimants and second-lien payment-in-kind noteholders were impaired.
Under the plan, first-lien claimants were entitled to $302 million and will receive $200 million in exit term loans, 100% of new common equity, subject to dilution by a management incentive plan, and warrants. The estimated $320 million of claims were expected to result in a recovery of 79.5% to 99.3%, court documents show.
Second-lien PIK claims, allowed at $330 million, will receive warrants, subject to dilution by a management incentive plan. Recovery is estimated at 1.2%-2.1%.
General unsecured claims, estimated at $8.2 million, are unimpaired. The plan canceled existing equity.