Sinclair Trades Old Debt For New Debt In Fresh Diamond Deal

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Sinclair Broadcast Group indirect subsidiaries Diamond Sports Group and Diamond Sports Finance Company are moving ahead with a private exchange offer for any and all of the issuers’ outstanding 6.625% Senior Notes due 2027 for newly issued 12.750% Senior Secured Notes due 2026 — and a cash payment on the terms.


The notes are listed as “CUSIP/ISIN 25277LAE6 / US25277LAE65; U2527JAC9 / USU2527JAC90,” and the transaction is subject to the conditions set forth in a Confidential Offering Memorandum, Offer to Exchange and Consent Solicitation Statement, dated as of May 12.

Concurrently with the Exchange Offer, the issuers will solicit consents from Eligible Holders of the Senior Notes to amend the indenture governing the Senior Notes.

The Proposed Senior Notes Amendments would eliminate most of the restrictive covenants and certain of the events of default contained in the Senior Notes Indenture.

The Issuers must receive consents from holders of a majority in aggregate principal amount of outstanding Senior Notes not owned by the Issuers or any of their affiliates to adopt the Proposed Senior Notes Amendments.

Holders who validly tender their Senior Notes will be deemed to consent to the Proposed Senior Notes Amendments, and holders may not deliver consents to the Proposed Senior Notes Amendments without validly tendering their Senior Notes in the Exchange Offer.

The following table sets forth the consideration offered in the Exchange Offer and Consent Solicitation:

 

Consideration per $1,000 Principal Amount of Senior Notes Tendered
CUSIP/ISIN Outstanding Principal
Amount of Senior Notes
Total Consideration if Tendered prior
to or at the Early Tender Time (as
defined below) (1)
Total Consideration if Tendered
after the Early Tender Time (1)
25277LAC0 /

US25277LAC00;

U2527JAB1 /
USU2527JAB18

$1,820,308,000 $467 in aggregate principal amount of
New Secured Notes and $133 in cash
$467 in aggregate principal amount of
New Secured Notes and $103 in cash
 

(1) Additionally, eligible holders of the Senior Notes that are validly tendered at or prior to the Expiration Time (as defined below) and accepted
for exchange will receive accrued and unpaid interest, if any, from the last interest payment date up to, but not including, the Settlement Date (as
defined below) and will not be entitled to receive an interest payment on such Senior Notes on August 15, 2020.  Interest on the New Secured Notes
will accrue from the Settlement Date.

 

The Exchange Offer will expire at Midnight ET on June 9, unless extended or earlier terminated by the issuers. Eligible Holders that validly tender their Senior Notes and deliver consents prior to 5pm ET on May 26, an “early tender time,” and do not validly withdraw their Senior Notes by then will receive the total consideration set out in the applicable column in the table above.

Holders that validly tender their Senior Notes after the Early Tender Time and on or before the Expiration Time will receive the total consideration set out in the applicable column in the table above. Validly tendered Senior Notes may not be withdrawn and consents may not be revoked after the Withdrawal Deadline, subject to limited exceptions.

Importantly, interest on the New Secured Notes will accrue from the Settlement Date at a rate of 12.750% per annum.

Interest on the New Secured Notes will be paid on February 15 and August 15 of each year, beginning on February 15, 2021.

Prior to August 15, 2022, the Issuers may redeem the New Secured Notes, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the applicable New Secured Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a “make whole” premium (assuming for purposes of the calculation of such “make whole” premium that interest were to accrue on the New Secured Notes at a rate for such “make whole” period equal to 5.375% per annum). Beginning on August 15, 2022, the Issuers may redeem the New Secured Notes, in whole or in part, at any time or from time to time at certain redemption prices set forth in the Offering Memorandum. In addition, on or prior to August 15, 2022, we may redeem up to 40% of each series of the New Secured Notes using the proceeds of certain equity offerings.

The New Secured Notes are not guaranteed by Sinclair; Sinclair Television Group; or any of STG’s subsidiaries.

 

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