LBI Media reports results of exchange offers and consent solicitation

By Susanna Moon

Chicago, Dec. 19 – LBI Media, Inc. gave the results of its exchange offers and consent solicitation for some series of notes, which began on Nov. 20.

In the end, investors had tendered $140.4 million, or about 99.5%, of its 11½%/13½% PIK toggle second-priority secured subordinated notes due 2020, according to a company press release.

Investors also had tendered all $54.2 million outstanding principal amount of 8½% senior subordinated notes not held by LBI Media or LBI Media’s affiliates, of which about $45.5 million had been tendered in exchange for new notes and about $8.7 million had been tendered in exchange for cash, according to a company press release.

As a result, the company said it will issue $188.3 million principal amount of new notes and pay $8.7 million in cash in exchange for tendered notes.

Media said it expects that about $211.5 million principal amount of new notes will be issued and $11.8 million paid in cash for the exchange offers, consent solicitations, new notes placement and to pay the structuring fee, the press release noted.

Media also received the needed consents to amend ntoes notes.

Investors had delivered consents for all $220 million of the 10% senior secured notes not held by LBI Media or LBI Media’s affiliates.

The exchange offers and consent solicitations ended at midnight ET on Dec. 18. The offers began on Nov. 20.

As previously announced, the company offered 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 also offered 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 also solicited consents for these series of notes and one other, for which it needed to obtain consents representing a majority of each note series.

Early tender update

On Dec. 5 the company provided an early tender update, with investors having tendered $141.1 million, or about 99.3%, of its 11½%/13½% PIK toggle second-priority secured subordinated notes due 2020 by 5 p.m. ET on Dec. 4.

Investors also had tendered $46.3 million, or about 85.4%, of the outstanding principal amount of 8½% senior subordinated notes not held by LBI Media or LBI Media’s affiliates, of which about $45.5 million had been tendered in exchange for new notes and about $800,000 had been tendered in exchange for cash.

Also, investors had delivered consents for all $220 million of the 10% senior secured notes not held by LBI Media or LBI Media’s affiliates.

D.F. King & Co., Inc. (212 269-5550 for brokers and banks or 866 745-0273 for all others) was 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 tendered their notes by 5 p.m. ET on Dec. 4 will receive the total payment of $1,010 of new notes per $1,000 principal amount.

The exchange payment included a consent payment of $10.00 of new notes, which is not being offered to holders who tender after the consent deadline.

Holders will also receive accrued interest on their exchanged notes in the form of new notes up to but excluding the settlement date.

In connection with the tender offer for the PIK notes, the company solicited consents to amend the note indentures to eliminate or waive substantially all of the restrictive covenants and eliminate events of default and to modify covenants regarding mergers and consolidations and to modify or eliminate other provisions.

Holders who tendered their notes were deemed to consent to the proposed amendments.

8½% notes exchange

In the offer to exchange the 8½% senior subordinated notes, the company offered either $1,000 of 11½%/13½% PIK toggle second-priority secured subordinated notes due 2020, series II or $1,000 in cash. Holders could 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 on their exchanged notes up to but excluding the settlement date.

The company also solicited consents of the holders of a majority of these notes to amend the note indentures 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.

10% notes solicitation

The company solicited consents from holders of its 10% senior secured notes due 2019 to proposed amendments to the notes indenture to permit the exchange offers.

The consent payment will be $2.50 per $1,000 principal amount of notes.

Third-party consents

The exchange offers and first-priority senior secured notes consent solicitations were 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 modifications to permit the exchange offers and new notes placement.

The company previously said it obtained the consent from a holder of a majority of the total principal amount of the holding company’s 11% senior notes due 2017 to amend the notes to allow the exchange offers and 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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