American Media gets note waiver for reporting-related defaults

By Angela McDaniels

Seattle, March 20 - American Media Operations Inc. received waivers and consents on Monday from holders of a majority of its 10¼% series B senior subordinated notes due 2009 and 8 7/8% senior subordinated notes due 2011, according to an 8-K report filed with the Securities and Exchange Commission on Friday.

The noteholders agreed to waive events of default related to the company's failure to comply with reporting requirements under the indentures governing the notes. The company said it sought the waiver because it plans to restate its 10-K report for the fiscal year ended March 31, 2005 and its 10-Q reports for the quarters ended June 30, 2005 and Sept. 30.

The restatement will primarily address reclassifications related to accounting for display rack costs, which are expected to result in a reduction of revenues but not change operating income, net income or EBITDA.

The company sought consents for an amendment to the note indentures that adds a requirement that the company meet leverage ratios for specified future periods. If the ratios are not met, the company may be required to make additional payments to the noteholders, according to the filling.

Noteholders who consented received a $10.00 consent fee per $1,000 principal amount of notes.

American Media is a Boca Raton, Fla., magazine publisher.

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