LBI Media misses $3.8 million Oct. 15 discount notes interest payment

By Caroline Salls

Pittsburgh, Oct. 18 - LBI Media Holdings, Inc. did not make the $3.8 million semi-annual interest payment due on Oct. 15 on its 11% discount notes due 2013, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The company said non-payment will not constitute an event of default unless the payment is not made within the current 30-day grace period.

If LBI does not make the interest payment by Nov. 14, however, the notes could be accelerated. There was a total of $72.2 million of outstanding obligations, including interest, on the notes as of Oct. 15.

Potential defaults

In addition, any failure to make the interest payment on $10 million or more of the discount notes by Nov. 14 will trigger an event of default on LBI Media, Inc.'s amended and restated credit agreement.

LBI Media owed a total of $22.9 million under the credit agreement as of Oct. 15.

If the amount outstanding under the credit agreement is accelerated and the principal amount outstanding at the time of acceleration totals $10 million or more, the credit agreement acceleration would constitute an event of default on LBI Media's first-priority, senior secured notes, with a total of $220 million was outstanding as of Oct. 15, as well as its 8½% senior subordinated notes due 2017, with a total of $232.8 million outstanding as of Oct. 15.

Exchange offer amended

In addition, LBI said it has amended the terms of a private exchange offer and solicitation of consents on the holding company's discount notes and LBI Media's old senior subordinated notes.

LBI Holdings and LBI Media are offering to exchange either new 11% second-priority secured springing subordinated notes due 2020 of LBI Media or new 11% senior notes due 2017 for any and all of LBI Holdings' outstanding discount notes, at the discount noteholders' discretion.

Under the amended exchange offer, participating holders of discount notes will receive unpaid interest on their accepted discount notes through Oct. 15 in cash.

Participating holders of discount notes will also receive unpaid interest on their accepted discount motes from Oct. 15 up to, but not including, the settlement date of the amended exchange offers in the form of either second-priority secured springing subordinated notes or Holdings notes, consistent with the new notes that the holder elected to receive in exchange for its discount notes.

The amount of notes to be received will be rounded to the nearest $1,000 principal amount.

LBI said 58.5% of the principal amount of the discount notes not held by the holding company or its affiliates, have delivered or have agreed to deliver their consents to the proposed amendments to the discount notes.

The company said the proposed amendments will eliminate or waive substantially all of the restrictive covenants in the discount notes indenture.

Subordinated notes offer

Meanwhile, LBI Media is concurrently offering to exchange its new second-priority secured springing subordinated notes for any and all of its outstanding old senior subordinated notes.

Participating holders receive unpaid interest on their accepted old senior subordinated notes up to, but not including, the settlement date of the amended exchange offers in the form of second-priority secured springing subordinated notes, with the amount to be rounded to the nearest $1,000 principal amount.

The company said old notes can still be tendered and exchange offer consents can still be delivered until midnight ET on Oct. 25.

LBI Media is a Burbank, Calif., owner and operator of Spanish-language radio and television stations.

© 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.