Last month Young Broadcasting decided to pass on a $6.125 million interest payment on one bond issue. Now it’s done the same with a $4.513 million payment due on its Senior Secured Credit Facility. The company is negotiating with its lenders and, as it happens, both interest payment grace periods expire next week. Stay tuned.
In the latest move, Young that, as part of a strategy to preserve liquidity, it determined to forego making the $4.513 million interest payment due February 6th on the company’s Senior Secured Credit Facility due 2012. Under the terms of the facility, a 10-day grace period will apply to the missed interest payment.
The other interest payment had been due January 15th, but it had a 30-day grace period. So, both grace periods expire next week.
“As previously disclosed, Young Broadcasting continues to pursue discussions with its debtholders to restructure its balance sheet, improve liquidity, and strengthen its business operations to enhance its value for its employees, viewers, advertisers and local communities. The company does not anticipate that these discussions will impact the operations of its stations or its ability to pay its trade creditors in the ordinary course,” Young said in its latest announcement.
RBR/TVBR observation: The clock is ticking, but just because the grace periods will run out next week, that doesn’t mean that the creditors will automatically begin legal action. It all depends on how the restructuring talks are progressing.