Article/Intelligence
Primary High Yield: Getty Images New SSNs’ Anti-LME ‘Omni-Blocker’ Covenant May Provide Illusory Protection Due to Failure to Include in Sacred Rights
Relevant Item:
Secured Notes Due 2030 Primary Covenant Analysis
Getty Images is issuing $628 million of new senior secured notes due 2030 (the “new 2030s”) in connection with the company’s pending merger with Shutterstock. Proceeds from the new 2030s will be used to pay consideration to shareholders and to repay amounts under Shutterstock’s credit agreement. Initial price talk for the notes was in the mid-10% area.
The new 2030s include a relatively restrictive covenant package, which includes an anti-LME covenant, also known as an “omni-blocker.” The omni-blocker in the new 2030s generally bars certain non-pro-rata exchange transactions, but because amendments to the omni-blocker are not within the sacred rights, the covenant could be removed with majority noteholder consent, which renders the protection largely illusory.
We have completed a comprehensive analysis of the covenant package relating to the new 2030s, including key considerations. We encourage users to review the full covenant analysis, available HERE.
The company’s flexibility under the new notes is summarized in the graph below:
The following table summarizes certain material bondholder protections and material aggressive terms included in the new 2030s:
For the current state of the market regarding the frequency of aggressive provisions and the range of basket sizes, please consult our Covenants Cheat Sheet, which is available HERE, and our Aggressive Terms Spotlight, which is available HERE.
The company’s pro forma capital structure is summarized below:
To request a covenant analysis of any other new bond or loan offering, please submit the offering memorandum or loan document to us at [email protected].
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