Sinclair Television to launch $530 million of term loans on Tuesday

By Sara Rosenberg

New York, Nov. 28 - Sinclair Television Group Inc. is set to hold a lender call at 3:30 p.m. ET on Tuesday to launch $530 million of incremental term loans, according to a market source.

J.P. Morgan Securities LLC is the lead bank on the deal.

The debt consists of a $250 million incremental term loan A due March 2016 talked at Libor plus 225 basis points and a $280 million incremental term loan B due October 2016 talked at Libor plus 300 bps with a 1% Libor floor, the source said.

Original issue discounts on the loans are still to be determined, the source continued.

In addition, the company is seeking an amendment to its existing credit facility to increase its revolver to $100 million from $75.4 million and extend the maturity to March 2016 from 2013.

The amendment would also increase incremental loan capacity and television station acquisition capacity and provide more flexibility under the covenants.

Proceeds from the incremental term loans will be used to help fund the acquisitions of Freedom Communications' broadcast assets, including eight stations, and Four Points Media Group LLC.

Freedom, an Irvine, Calif.-based media company operating print publications, broadcast television stations and interactive businesses, is being acquired for $385 million, and Four Points, an owner and operator of seven stations, is being bought from Cerberus Capital Management LP for $200 million.

Other funds for the purchases will come from cash on hand and/or revolver borrowings.

Closing on the Freedom transaction is expected in early January, and Four Points is targeted to close in late March.

Since the closings are a while away, roughly $350 million of the new term loan debt is expected to be done on a delayed-draw basis.

The company had previously stated that for the Freedom and Four Points acquisitions combined, leverage is anticipated to increase minimally - no more than half a turn - and that the new assets are expected to generate so much free cash flow that leverage should quickly come back down to pre-acquisition levels.

Sinclair is a Hunt Valley, Md.-based television broadcasting company.

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