Media General lenders agree to extend if it sells $225 million notes

By Angela McDaniels

Tacoma, Wash., March 20 - Media General, Inc. said the maturity date of its $363 million of bank debt will be extended to March 30, 2015 from March 29, 2013 if the company raises at least $225 million through an issuance of new notes by May 25.

Of the $225 million, a minimum of $190 million will be applied to pay down the outstanding term loan and an amount determined by formula will be set aside in a liquidity account, according to a company news release.

The company's revolver has been reduced to $45 million. No amount is outstanding at this time.

In addition to the term loan paydown, the revolver commitment will be correspondingly reduced if the liquidity account funding is increased by more than $15 million.

The extension was agreed to under an amendment made on Tuesday. The company said the amendments include covenant modifications that will provide it more flexibility to operate in the current uncertain economic environment.

The amended bank term loan facility has an interest rate of Libor plus 500 basis points to 700 bps with a 1.5% floor. The commitment fee ranges from 225 bps to 250 bps. Both are determined by the company's leverage ratio.

In addition to this cash interest, the company will accrue payment-in-kind interest at the rate of 1.5%.

"While interest costs will be higher in 2012, our amended credit agreement will provide Media General with more flexibility to operate, as well as expanded opportunities to reduce total debt through asset sales and pursuit of further refinancing options," president and chief executive officer Marshall Morton said in the release.

The company said it expects operating cash flow in 2012 will cover interest payments as well as its roughly $20 million of capital expenditures and $13 million of retirement plan contributions.

Bank of America is the administrative agent on the bank loans.

JPMorgan will advise Media General on the issuance of new notes.

Media General provides broadcast television, digital media and print products. It is based in Richmond, Va.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.