Banks led by JPMorgan Chase have refinanced the senior debt of LIN Media. The refi, however, caused Moody’s to downgrade some other LIN debt.
According to an SEC filing by LIN:
“The New Credit Agreement consists of a six-year, $125.0 million term loan facility and a five-year, $75.0 million revolving credit facility (and also allows for the establishment thereunder of certain incremental term loan and revolving credit facilities). Borrowings under the New Credit Agreement will be used (i) to pay a portion of the call price for the Company’s partial redemption (the “Partial Redemption”) of its 6 1/2% Senior Subordinated Notes due 2013 and 6 1/2% Senior Subordinated Notes due 2013 – Class B (collectively, the “2013 Notes”), as described under Item 8.01 of this current report, (ii) to pay accrued interest, fees and expenses associated with the Partial Redemption and the termination of the Prior Credit Agreement, and (iii) for general corporate purposes.
Borrowings under the New Credit Agreement bear interest at a rate based, at the Company’s option, on an adjusted LIBOR rate, plus an applicable margin range of 2.75% to 3.25%, or an adjusted Base Rate, plus an applicable margin range of 1.75% to 2.25%, depending, in each case, on the Company’s consolidated senior secured leverage ratio; provided, however, that until such time as the Company shall have refinanced, redeemed or discharged its remaining 2013 Notes, the applicable margins shall not be less than 3.00% (in the case of LIBOR loans) and 2.00% (in the case of Base Rate loans).”
Moody’s Investor Services said it downgraded LIN Television Corporation’s 8.375% senior unsecured notes to B3, LGD 4 – 58% from Ba3, LGD 2 – 23% and downgraded the 6.5% senior subordinated notes to Caa1, LGD 5 – 83% from B3, LGD 5 – 73%.
“On October 26, 2011, LIN entered into a new credit agreement for a $75 Million Senior Secured First Lien Revolver due 2016 (LIBOR + 300 bps) and a $125 Million Senior Secured First Lien Term Loan A due 2017 (LIBOR + 300 bps). The new debt issuance along with approximately $14 million of balance sheet cash will be used to redeem approximately $165 million of 6.5% Senior Subordinated Notes due 2013. We view this transaction as the first step towards the refinancing of near term maturities, primarily the 6.5% senior subordinated notes due 2013. We expect the company to be opportunistic in refinancing the remaining $252 million of Sr. Subordinated Notes due 2013,” said Moody’s.