IAC heads toward spins with almost $2B financing

IAC/InterActiveCorp is getting closer to spinning off four of its operating units, with the company saying Friday it priced $840 million in bonds and received $1.15 billion in bank commitments related to the spinoffs of three units.

The Barry Diller-led Internet conglomerate said it received the financing commitments for its Interval Leisure Group Inc. time-share unit, Ticketmaster event ticketing unit and HSN home shopping network units. In addition to those 3 companies, IAC will spin off LendingTree.com.

IAC's board approved the spinoffs in November, and the process is expected to be completed in August.

Specifically, Interval signed a deal to place $300 million worth of senior unsecured notes due 2016 with a 9.5 percent coupon rate. Interval has commitments for a $150 million 5-year Term Loan A and $50 million five-year revolver. IAC anticipates Interval will have funded debt of $450 million and about $120 million in cash when it is spun off.

The agreement for Ticketmaster also provides for the sale of $300 million of senior unsecured notes due 2016, but with a 10.75 percent coupon rate. Ticketmaster has commitments for a $100 million five-year Term Loan A, $350 million Term Loan B and $200 million five-year revolver. IAC expects that when it is spun off, Ticketmaster will have funded debt of $754 million and about $500 million in cash.

The agreement HSN signed was for the sale of $240 million of senior unsecured notes due 2016 with an 11.25 percent coupon rate. HSN has commitments for a $150 million five-year Term Loan A and $150 million five-year revolver. IAC thinks that when HSN is spun off it will have funded debt of $390 million and $50 million in cash.

Proceeds from the financing of the units will be used to fund a dividend for IAC before the spins take place, and will also be used to fund the tender of the 7 percent notes that are not exchanged for Interval notes.

"These actions move us substantially closer to completing the spin-offs on the timetable we have laid out," Tom McInerney, IAC's chief financial officer, said in a statement.

IAC expects the bank commitments to be finalized next week, and expects the HSN and Ticketmaster bond offerings to close the week of July 28. The Interval bond offering will close along with the 7 percent note exchange.