Young skips bond payment


Young Broadcasting was scheduled to pay $6.125 million in interest to bondholders January 15th, but didn’t. The company said it is in talks with bondholders to restructure its balance sheet. Besides, it has a 30-day grace period to make the interest payments.

The missed interest payment was on the company’s 8.75% Senior Subordinated Notes due 2014. Young has $825 million of debt outstanding and warned in November that it could be heading to bankruptcy court if it can’t come to terms with its lenders.

“Young Broadcasting intends 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 on Friday.

Young Broadcasting has retained UBS Investment Bank and Sonnenschein Nath & Rosenthal LLP to provide advisory services in connection with its restructuring efforts. “There can be no assurance that any agreement with respect to any restructuring will be reached or, if any agreement is reached, as to the terms thereof,” the company noted.

RBR/TVBR observation: Silver Point Capital, which already owns Granite Broadcasting, is believed to be a big bondholder at Young and will likely end up swapping for a big equity stake. What remains to be seen is whether the restructuring can be accomplished without the necessity of a Chapter 11 filing.