ION Media to exchange first-lien debt via prepackaged bankruptcy

By Caroline Salls

Pittsburgh, May 19 - ION Media Networks, Inc. made a prepackaged Chapter 11 bankruptcy filing Tuesday in the U.S. Bankruptcy Court for the Southern District of New York after a group of holders of more than 60% of its first-lien senior secured debt agreed to convert that debt for equity, according to a company news release.

According to the release, more than $2.7 billion in legacy debt and preferred stock will be extinguished under the proposed restructuring, and the company will be capitalized with a $150 million new funding commitment underwritten by a group of first-lien debtholders.

Participation in the new funding commitment, which is part of a $300 million facility that converts into equity upon completion of the restructuring, will be made available to all holders of ION's first-lien senior secured debt.

"We are pleased with the support from our first-lien senior debt holders to resolve the company's legacy debt issues and fund our television growth plans," chairman and chief executive officer Brandon Burgess said in the release.

"We are positioning the business for growth and will emerge from the restructuring in a strong position to serve viewers, clients, and stakeholders."

ION said it will continue operations as normal throughout the financial restructuring process.

Moelis & Co. LLC is serving as the company's financial adviser.

The company listed more than $1 billion in both assets and debt.

ION is a West Palm Beach, Fla.-based television broadcaster. Its Chapter 11 case number is 09-13125.

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