LBI Media begins exchange offers for several series of notes

By Toni Weeks

San Luis Obispo, Calif., Nov. 20 – LBI Media, Inc. said it began several exchange offers and consent solicitation for some of its notes series.

The company is offering to exchange its outstanding $142 million principal amount of 11½%/13½% PIK toggle second-priority secured subordinated notes due 2020 for new 11½%/13½% PIK toggle second-priority secured subordinated notes due 2020, series II.

It is also offering to exchange its outstanding $54.2 million principal amount of 8½% senior subordinated notes due 2017 for cash and/or new 11½%/13½% PIK toggle second-priority secured subordinated notes due 2020, series II.

The company is also commencing related consent solicitations, as noted below, for these series of notes and one other, for which it needs to obtain consents representing a majority in principal amount of the applicable note series.

Both exchange offers and all of the consent solicitations expire at midnight ET on Dec. 18.

D.F. King & Co., Inc. (212 269-5550 for brokers and banks or 866 745-0273 for all others) is the information agent and exchange agent for the exchange offers and solicitation of consents.

PIK toggle notes exchange

In the offer to exchange the PIK toggle notes, holders who tender their notes by 5 p.m. ET on Dec. 4 will receive the total consideration of $1,010 of new notes per $1,000 principal amount. The exchange consideration includes a consent payment of $10.00 of new notes, which is not being offered to holders who tender after the consent expiration time.

Holders will also receive accrued interest, if any, on their exchanged notes in the form of new notes up to, but not including the settlement date.

In connection with the tender offer for the PIK toggle, the company is soliciting consents from holders of the second-priority secured subordinated notes to amend the indentures to eliminate or waive substantially all of the restrictive covenants and eliminate certain events of default and to modify covenants regarding mergers and consolidations and to modify or eliminate certain other provisions.

Holders who tender their notes are deemed to consent to the proposed amendments.

LBI Media said it has entered into a support agreement with some noteholders representing about $64 million principal amount, or roughly 46%, of the second-priority secured subordinated notes. These holders have agreed to tender their notes and deliver the corresponding consents.

8½% notes exchange

In the offer to exchange the 8½% senior subordinated notes, the company is offering either $1,000 of 11½%/13½% PIK toggle second-priority secured subordinated notes due 2020, series II or $1,000 in cash. Holders may elect notes or cash or any combination of the two, in each case in minimum denominations of $1,000 and integral multiples thereof.

Holders will also receive a cash payment of accrued interest, if any, on their exchanged notes up to, but not including, the settlement date.

The company is also soliciting consents of the holders of a majority in principal amount of these notes to amend the indentures governing the senior subordinated notes to eliminate or waive substantially all of the restrictive covenants, eliminate some events of default, modify covenants regarding mergers and consolidations and modify or eliminate other provisions. Holders who tender their notes are obligated to consent to the amendment.

Media said it has entered into a support agreement with some noteholders of about $45.8 million principal amount, or roughly 84.5%, of the second-priority secured subordinated notes. These holders have agreed to tender their notes and deliver the corresponding consents.

10% notes solicitation

The company is also soliciting consents from holders of its 10% senior secured notes due 2019 to proposed amendments to the indenture governing the notes to permit the exchange offers and related transactions.

Holders of record as on 5 p.m. ET on Nov. 19 who validly deliver consents by the consent expiration time will receive a cash payment equal to $2.50 per $1,000 principal amount of notes.

Third-party consents

The exchange offers and first-priority senior secured notes consent solicitations are subject to, and conditioned upon, obtaining third-party consents from the lenders of a majority of the loans, commitments and letters of credit exposure under the amended and restated credit agreement dated March 18, 2011 to amendments to the revolver that include, among other things, modifications to permit the exchange offers and new notes placement.

The company said it has obtained the consent, subject to some conditions, from a holder of a majority of the total principal amount of Holdings’ 11% senior notes due 2017 to amendments to the indenture governing those notes to allow the exchange offers ad new notes placement.

New notes terms

The new notes to be issued in the exchange offers will mature on April 15, 2020. On or prior to Nov. 15, 2016, they will accrue interest at a rate of either 8¾% in cash plus 2¾% paid in kind but only if the holder is notified by the company prior to the beginning of an interest period, or 4¼% in cash plus 9¼% paid in kind.

Beginning on Nov. 15, 2016, the coupon will be 8¾% in cash plus 2¾% paid in kind.

Private placement

In connection with the exchange offers, LBI Media will also issue up to $20 million principal amount of new notes in a private placement, subject to the completion of the exchange offers.

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

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