Emmis amends loan, extending some maturities, changing covenants

By Sara Rosenberg

New York, March 30 - Emmis Communications Corp. amended its credit facility, extending about $182.9 million of its term loan to Nov. 1, 2014 and revising covenants, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

The extended loan, which was purchased by Canyon Capital Advisors LLC, is initially priced at 12.25% cash pay. Pricing can range from 7.5% to 12.25% in cash plus 0% to 7% in PIK, subject to a minimum yield of 12.25%.

Pricing on the roughly $146.1 million non-extended term loan due Nov. 1, 2013 is Libor plus 400 basis points.

Regarding covenants, the amendment removed the leverage ratio and fixed-charge requirement until Nov. 30, 2012, at which time the leverage ratio will be set at 5 times and the fixed-charge ratio will be set at 1.15 times.

Also, from Nov. 30, 2011 through Aug. 31, 2012 there will be a minimum EBITDA test of $25 million per rolling four-quarter test period.

In addition, the requirement that annual audits be certified without qualification will be waived for the fiscal years ending February 2011 and 2012.

The amendment was completed on March 29.

Bank of America is the administrative agent on the deal.

In return for consenting to the amendment and purchasing the extending term loan, Canyon is getting an exit fee of 6%.

Emmis is an Indianapolis-based media company.

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