Instead of $500 million, Citadel Broadcasting on Friday (12/10) sold a new issue of $400 million in senior unsecured notes due 2018. But while the size of the issue was reduced, the pricing was attractive.
The issue of $400 million was sold at par and will carry a coupon of 7.75%. Moody’s Investors Service had given the issue a Baa3 rating, its lowest investment grade rating. The new bonds were sold in a private placement to qualified institutional investors, but under the indenture Citadel is to file with the SEC within a year to register equivalent notes for public trading and make an exchange offer for the existing notes.
Citadel said in an SEC filing that it expects to receive proceeds of appr4oximately $391 million from the bond sale, after offering expenses. It will use the cash and a new $350 million term loan to refinance $750 million of existing higher-cost debt. (The company has total senior debt of $763 million following its exit from Chapter 11.) It will also have access to a new $150 million revolving credit facility, which will be undrawn at closing.