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Spanish Broadcasting defaults on 12½% notes, may seek to swap out
By Susanna Moon
Chicago, April 20 – Spanish Broadcasting System, Inc. said it failed to repay its $275 million of 12½% senior secured notes April 15, 2017 at maturity and that it is considering “a comprehensive recapitalization” to address the default.
The recapitalization may include an exchange offer and consent solicitation with the noteholders to amend the terms of the notes indenture, according to an 8-K filing with the Securities and Exchange Commission.
Spanish Broadcasting “has been pursuing a series of options, with the assistance of our legal and financial advisors, including discussions with third party capital providers including a top-tier banking institution and with representatives of the holders of our notes and preferred stock,” according to an earnings report for the quarter and year ended Dec. 31 attached to the 8-K filing.
The company’s options also include use of cash on hand; selling non-core assets with proceeds to be used to repay some of the outstanding notes; and new debt, equity-linked securities or equity offerings.
In connection with the recapitalization plan, the company said it has begun talks with representatives of the noteholders and holders of its 10¾% series B cumulative exchangeable redeemable preferred stock.
The company added that it is also in default with the security agreement covenant for the deposit account control agreements and the related indenture covenant regarding compliance with the security agreement, and also in default under the future guarantors covenant of the notes indenture.
Spanish Broadcasting is a Coconut Grove, Fla.-based Spanish language broadcaster.
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