McClatchy to get $3.2 billion credit facility; $550 million bridge loan for Knight-Ridder buy

By Sara Rosenberg

New York, April 21 - The McClatchy Co. plans to approach the loan market in a few weeks with a proposed $3.2 billion senior unsecured credit facility (Ba1/BBB), according to a market source.

Bank of America and JPMorgan are the lead banks on the deal.

The facility consists of a $1 billion revolver and a $2.2 billion term loan A, the source said.

In addition to the pro-rata bank debt, McClatchy has also received a commitment for a $550 million bridge loan.

Proceeds from the financing will be used to fund the acquisition of Knight-Ridder Inc. in a transaction valued at $67.25 per share, consisting of $40.00 in cash and a fixed fraction of 0.5118 of a class A McClatchy share. The transaction values Knight-Ridder at $6.5 billion, including about $2 billion in assumed debt at closing.

Pro forma 2005 revenues is $2.83 billion and combined pro forma EBITDA is $754 million, assuming full-year ownership of all retained papers, after planned divestitures, which contribute $219 million of EBITDA, and before cost synergies.

McClatchy is a Sacramento, Calif., newspaper and internet publisher. Knight-Ridder is a San Jose, Calif., company with substantial newspaper and internet assets.

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