Following numerous extensions of past-due interest payments, Morris Publishing has now come to terms with the overwhelming majority of its bondholders on a debt restructuring. The company’s bank lenders are on board as well.
Morris announced that it has agreed to the terms of a restructuring agreement with the holders of over 75% of its outstanding senior subordinated notes. If the restructuring is approved, the holders of the $278.5 million in outstanding notes would exchange their existing notes for $100 million of new second lien secured notes. At that time, affiliates of Morris Publishing would make capital contributions and repay indebtedness to Morris Publishing in order to cancel $110 million of its $138.75 million in existing senior secured indebtedness. “The restructuring agreement is subject to the final negotiation and execution of the definitive legal documentation and other closing conditions,” the company noted.
In addition, Morris Publishing has obtained an extension until October 16, 2009 to make two semi-annual interest payments of $9.7 million on its senior subordinated notes originally due Feb. 1, 2009 and August 3, 2009. The holders of more than 80% of the outstanding amount of senior subordinated notes have agreed to extend the forbearance period for these payments.
Morris Publishing’s senior bank group also agreed to extend until October 2, 2009 the waiver of the cross defaults arising from the overdue interest payments on the senior subordinated notes.
Morris Publishing Group LLC, which owns and operates 13 daily newspapers along with various other print properties, is a wholly owned subsidiary of Morris Communications. The parent company also has holdings in radio, outdoor and other media properties, but they are not within the division with the publicly traded bonds.
