Clock ticking for Interep


“We’re working positively with the bondholders at the present time,” CFO Bill McEntee told RBR/TVBR.

CEO David Kennedy, who noted that addressing the company’s balance sheet has been his 1st priority since taking the job, said not only that the talks are “progressing very well,” but added that they are “nearly complete.” Kennedy said Interep will have secured new financing, not just to cover the bonds, but for growth also, well in advance of the deadline. Interep owns several national radio rep firms, two national TV rep firms serving Hispanic stations, and rep firms for Internet ad sales.

RBR/TVBR observation: The melt-down of the US credit markets last year certainly didn’t help companies facing a hard deadline for refinancing, such as Interep. Its bondholders, primarily Oaktree Capital Management, will likely to agree to something less than 100% of face value for their bonds. Oaktree, after all, paid well below face value to acquire its stake, then tried to pressure management for a quick cash-out back in 2005 (4/18/05 RBR #76). That didn’t happen and Oaktree just had to sit back and wait for the July 1, 2008 deadline to move into view. We would not rule out a Chapter 11 filing, but if there is one soon it will be a voluntary, pre-packaged restructuring that already has approval from major creditors and just needs the blessing of a federal bankruptcy judge. Interep is not in danger of shutting down.