Media General talks $300 million notes due 2022 at 6%-to-6¼% for Friday

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 Friday morning, high-yield syndicate sources said late Thursday.

The deal was originally expected to price as a quick-to-market transaction after the order books were closed at mid-afternoon (ET) on Thursday. That was just hours after it was first announced and then pitched to potential investors via a mid-morning (ET) conference call.

However, it did not price during Thursday’s session, and several sources later said that it had been pushed back to Friday morning. They did not offer any possible explanations for the delay.

Price talk envisioning a yield in the 6%-to-6¼% region surfaced on Thursday afternoon.

The Rule 144A/Regulation S offering, which is being sold with registration rights, is being 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.

Co-managers on the deal are Barclays, Bank of America Merrill Lynch, Mitsubishi UFJ Securities International plc and Mizuho Securities USA Inc.

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

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

The funding also will include a new $1.015 billion 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 some 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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