Tribune grabs cash while it can


Tribune Company has notified its bank group that it is drawing a third of its $750 million senior secured revolving credit facility. Tribune doesn’t appear to actually need the cash for anything immediate, but is moving to make sure it has more cash on hand “in light of the current uncertainty in the credit markets.”  

Tribune had already drawn from the facility, so this $250 million draw will increase the balance outstanding to approximately $348 million, leaving the undrawn commitment at around $402 million. Tribune’s lending group consists of JPMorgan Chase Bank, N.A., as administrative agent, Merrill Lynch Capital Corporation, as syndication agent, Citicorp North America, Inc., Bank of America, N.A. and Barclays Bank plc, as co-documentation agents, and J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners.

“Tribune is borrowing under the Revolving Credit Facility to increase its cash position to preserve its financial flexibility in light of the current uncertainty in the credit markets,” the company said in its SEC filing.

Of those lenders, Merrill Lynch is selling itself to Bank of America as a result of the current credit crisis. Barclays recently acquired many of the assets of Lehman Brothers, which was forced into bankruptcy. So Tribune is certainly correct in noting “uncertainty” when it comes to credit availability.

RBR/TVBR observation: We doubt that Tribune is really worried that all those big name banks will go belly up. What it likely is worried about is that they might get nervous and try to find some way to get out of having to deliver on their loan commitments. Does the name Clear Channel Communications ring a bell? The banks did finally have to come through and fund the Clear Channel buyout, but they only parted with their billions after Clear Channel won some key court rulings and had the banks facing the possibility of huge legal penalties.