Media General expected to sell $300 million eight-year notes Thursday

By Paul Deckelman

New York, Oct. 30 – Media General Inc. is expected to price its previously announced $300 million offering of eight-year senior notes (B3/B+) on Thursday, high-yield syndicate sources said.

The issue is being marketed to potential investors via a conference call slated for 11 a.m. ET, with pricing expected Thursday afternoon.

The Rule 144A and Regulation S offering, which is being sold with registration rights, will be brought to market via left bookrunning manager RBC Capital Markets Corp., along with joint bookrunners Capital One Securities, Deutsche Bank Securities Inc., SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc.

Co-managers on the deal are Barclays, BofA Merrill Lynch, MUFG and Mizuho Securities USA Inc.

The notes will have three years of call protection and a change-of-control put at 101%.

Media General, a Richmond, Va.-based local television broadcasting and digital media company, is selling the notes as part of the financing for its pending merger with LIN Media LLC, a Providence, R.I.-based television broadcasting and multimedia company.

The funding also will include a new $1,015,000,000 credit facility that was launched last Friday via joint lead arrangers RBC, Deutsche Bank, SunTrust Robinson Humphrey, U.S. Bank and Capital One.

The notes are being officially issued by Media General Financing Sub, Inc. Upon the closing of the merger, this unit will merge with and into LIN Media subsidiary LIN Television Corp., which will continue as the surviving corporation and assume all of the issuer’s obligations under the indenture governing the notes.

The proceeds from the note issue, together with cash on hand, proceeds from previously announced divestitures and bank borrowings through proposed amendments to its existing credit agreement, will be used to pay a portion of the merger consideration for the business combination with LIN, to repay certain existing debt of LIN and to pay related fees and expenses.

Under the merger agreement LIN shareholders will receive $25.97 in cash or 1.4714 shares of the new holding company, subject to proration. The maximum cash amount that will be paid to the LIN Media shareholders is $763 million. Media General shareholders will receive one share of the new holding company for each share of Media General that they own upon closing.

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