Sinclair Broadcast, debt holders reach deal
NEW YORK — Shares of TV station owner Sinclair Broadcast Group Inc., which has been suffering from a decline in advertising, jumped Friday after the company said it had reached a deal to pay off about $438 million in convertible notes with new debt.
Its shares advanced 83 cents, or nearly 40 percent, to $2.98 in morning trading.
The Baltimore-based company said Thursday that it had a tentative agreement with a committee representing some holders of convertible senior notes that are due in May 2010 and January 2011. Sinclair would pay them 90 cents to 93.5 cents on the dollar by issuing notes secured by a second lien on the assets securing its bank credit facility. The new notes would mature in 2014.
The deal hinges on Sinclair raising enough money from the new notes and on the holders of 95 percent of the convertible senior notes accepting the offer.
The deal would remove one debt overhang from the company, but others remain. A $33.5 million term loan taken by Cunningham Broadcasting Corp., a local marketing partner, could cross-default to Sinclair’s secured credit facility.
Cunningham’s lenders extended the maturity date to Oct. 30 after Sinclair warned that it could file bankruptcy when the loan came due in July.
Sinclair owns or operates 58 television stations in 35 markets.
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