Emmis to buy some 6.25% convertible preferreds below market price

By Susanna Moon

Chicago, Nov. 11 - Emmis Communications Corp. said that it agreed to repurchase some of its 6.25% series A cumulative convertible preferred stock and signed an agreement with Zell Credit Opportunities Master Fund, LP to finance the purchases.

Emmis said it entered into securities purchase agreements with some holders to purchase the preferreds at prices that are below the closing share price on Nov. 10.

The purchases will settle under total return swaps, according to a company press release. The terms provide that until final settlement of the swaps, the seller agrees to vote its shares according to the prior written instructions of Emmis.

Zell Credit Opportunities has agreed to buy up to $35 million of unsecured notes from Emmis on up to four separate occasions by Feb. 2.

Proceeds from the notes are expected to be used to allow Emmis to ultimately acquire some of its preferreds through privately negotiated deals with individual preferred holders or through a tender offer.

Interest on the notes will accrue quarterly at a rate of 22.95% per year and is not payable in cash. The notes will mature in February 2015.

Emmis is an Indianapolis-based diversified media company.

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