Author: Gordon Platt
Rainbow National Offering Clears Way for Spin-Off

Rainbow National Services, the programming subsidiary of Bethpage, New York-based Cablevision Systems, sold $800 million of notes in a two-part offering in the private-placement market.

Cablevision, which began as a cable television operator on Long Island in 1973, serves 3 million households in the New York City area and owns a wide range of telecom, entertainment and sports assets.

Together with a $950 million senior secured credit facility, Rainbow National raised $1.75 billion in bank and bond financing.

The proceeds will be used to finance Voom, the company’s new direct-broadcast satellite service that offers a broad selection of programming for high-definition television, and to pay down debt.

The company sold $300 million of eight-year senior notes with a coupon of 8.75% at a yield of 8.875%, or 486 basis points over comparable US treasury securities.

It also sold $500 million of 10-year senior subordinated notes with a coupon of 10.375% at a yield of 10.5%, representing a spread of 630 basis points above treasuries.

Banc of America Securities, Bear Stearns, Credit Suisse First Boston and JPMorgan were joint lead managers for the sale.

James L. Dolan, president and CEO of Cablevision, says the financing demonstrated that the company is making steady progress on its plan to spin off Rainbow DBS, which runs the direct-broadcast satellite operations, and combine it with Rainbow Media’s three national networks.

The networks comprise AMC, the Independent Film Channel, and WE: Women’s Entertainment.

Rainbow National will become a subsidiary of Rainbow Media Enterprises following the spin-off, which will create two distinct companies with separate funding and management.

Cablevision will retain its cable and telecom businesses, which include high-speed Internet access and customized communications products via its fiber-optic network. It also will keep its controlling stake in Madison Square Garden and its sports teams, the New York Knicks, Rangers and WNBA Liberty. The company also operates Radio City Music Hall in Manhattan and owns Clearview Cinemas and a 50% stake in Fox Sports Net.

Nortek Sells Notes
As Part of Buyout
Providence, Rhode Island-based Nortek sold $625 million of senior subordinated notes in connection with the acquisition of the company by Thomas H. Lee Partners and members of Nortek’s management, including chairman and CEO Richard L. Bready.

Nortek makes building, remodeling and indoor environmental-control products, such as range hoods and ventilation products, as well as heating and air-conditioning systems.

The 10-year notes were offered with an 8.5% coupon in the private-placement market and to non-US investors under Regulation S.

· Gordon Platt