Sinclair Broadcast Group reported a tentative deal to pay off nearly $438 million in convertible notes. Under an agreement reached with a committee of note holders, the Sinclair subsidiary Sinclair Television Group would issue notes that would mature in 2014, reports the Baltimore Sun, and be secured by a second lien on assets securing the broadcaster's bank credit facility.
Sinclair would use the proceeds to repurchase outstanding debt from note holders who are entitled to exercise options in May 2010 and January 2011.
Sinclair had warned of possibly entering into Chapt. 11 bankruptcy protection while on a conference call with investors in mid-July.
The broadcaster said it would pay note holders 90 cents to 93.5 cents on the dollar, reported the Sun, an offer that would depend upon getting at least 95% participation by note holders and raising sufficient funds from the private placement of notes.
Sinclair had met with a committee representing its 3% and 4.875% Convertible Senior Notes holders August 10. Approximately $294 million of the 3% notes and $143.5 million of the 4.875% notes are outstanding.
During the meeting, “the Company and the Committee reached a tentative agreement in principle with respect to the Convertible Notes,” Sinclair said in a statement.
Sinclair reported second quarter broadcast revenue of $133 million earlier this month, down almost 19% from the same quarter last year.
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