A new private placement will fill the coffers at Salem Communications with $300 million that doesn’t have to be repaid until 2016. So, the company has announced a tender offer to buy back its existing public bonds.
Salem issued $100 million of 7.75% senior subordinated notes back in 2002, with a due date of 2010. The company had already bought back some of the notes, so the balance outstanding is $89.655 million. Salem is tendering to buy back any and all of those notes for $970 per $1,000 face value, plus a $30 consent payment. In other works, $1,000 total per $1,000 face value if holders will part with those notes now instead of waiting until next year. The tender is scheduled to expire on December 14th.
Meanwhile, the private placement will give Salem $300 million in new borrowing due 2016. The issue has not yet been priced. Along with $27 million of cash on hand and a new $30 million senior secured credit facility, Salem plans to refi its entire debt load and have a good idea of what its balance sheet is going to look like for the next five years.