Triple Crown Media launch pushed back; Delphi closes out troubled week with over a point in losses

By Sara Rosenberg

New York, Sept. 2 - Triple Crown Media Inc. has pushed back timing expectations on the launch of its proposed credit facility as normal merger requirements are now anticipated to take longer than were originally hoped.

Delphi Corp.'s bank debt saw some trading activity during Friday's shortened pre-holiday session at lower levels than were seen Thursday afternoon, bringing the week's total losses to approximately a point and half on both the revolver and the term loan.

Triple Crown Media is now expecting the launch of its proposed credit facility to be an October event as opposed to a late-September event because of merger to-do's and regulatory approvals, according to a market source.

The facility is being obtained in connection with the creation of Triple Crown through a spinoff from Gray Television Inc.

Gray Television is spinning off its Newspaper Publishing and Graylink Wireless businesses to its shareholders, creating Triple Crown Media, which will be a separately traded public company. Bull Run Corp., an Atlanta-based sports and affinity marketing, printing and publishing, and association management company, will then be merged into Triple Crown immediately following the spinoff.

Upon completion of the spinoff, each common shareholder of Gray will receive as a dividend one share of common stock of Triple Crown Media for every 10 shares of Gray common stock and for every 10 shares of Gray class A common stock.

On the date of the spinoff, Triple Crown Media will distribute $40 million to Gray, which Gray plans on using to reduce outstanding debt.

Bull Run common shareholders will receive 0.0289 shares of Triple Crown Media for each share of Bull Run common stock held.

On a combined basis, after the merger, current shareholders of Gray will own about 95% of the outstanding common stock of Triple Crown Media and certain holders of Bull Run preferred stock and current holders of Bull Run common stock will hold the remaining 5%.

Proceeds from the new credit facility will be used to make the $40 million distribution to Gray and to refinance all of Bull Run's bank debt and subordinated debt.

Wachovia will be acting as left lead bank on the new deal.

No details on the financing structure are available at this time, the source added.

Delphi ends week lower

Delphi's bank debt ended the week with total losses around the point-and-a-half mark as bankruptcy concerns have put constant pressure on the paper over the past few sessions.

On Friday, Delphi's term loan was quoted at 101¾ bid, 102¼ offered and its revolver was quoted at 94 bid, 95 offered, according to a trader.

By comparison, late Thursday afternoon, the term loan was quoted at 102¼ bid, 103 offered and the revolver was quoted at 94½ bid, 95½ offered.

However, "at the very end of the day" Thursday both tranches had actually come in to the new lower levels that were exhibited on Friday, the trader remarked.

Delphi is looking to former corporate parent General Motors Corp. for some sort of financial bailout and has warned that it could be forced into Chapter 11 if it does not get concessions from the United Auto Workers union and help from GM.

The company asked GM and the UAW to work out an arrangement that would give Delphi a hand with its spiraling labor costs, a legacy from its spinoff from GM a few years back.

And, Delphi's chief executive officer, Steve Miller, has indicated that a filing could come before the Oct. 17 change in the U.S. Bankruptcy Code that makes it less advantageous to filing debtors.

The bank debt opened on Monday around 103 bid, 104 offered on the term loan and around 95½ bid, 96½ offered on the revolver but has been grinding lower all week because media reports emerged last weekend saying that UAW wouldn't support all the concessions being sought by the companies, which sparked concerns over the company's future.

Although this week's heightened bankruptcy concerns have shone the spotlight on Delphi, the bank debt has actually been on everybody's radar ever since early August when the company announced that it drew down $1.5 billion under its revolving credit facility in order to have cash readily available to finance operations if needed.

After the draw was announced, all three rating agencies downgraded the company's loans - Moody's Investors Service to B3 from B1, Standard & Poor's to B- from BB- and Fitch Ratings to B from BB-.

However, shortly after the revolver draw and rating downgrades emerged, the company assured investors that it was and is working toward making a deal with UAW and GM, sparking hope in investors that a Chapter 11 filing was actually the most unlikely course that Delphi would need to take, and creating a short-lived rebound in bank debt levels.

Delphi is a Troy, Mich., supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology to vehicle manufacturers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.