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10.08.2009 12:00AM
Sinclair Commences Tender Offers on $437.5 Million in Senior Notes
HUNT VALLEY, MD.: Sinclair Television Group is commencing cash tender offers for notes due in 2018 and 2027. The offer covers any and all outstanding 3 percent convertible senior notes due 2027; and 4.875 percent senior notes due 2018.

Note holders are entitled to require Sinclair (NASDAQ: SBGI) to repurchase them at 100 percent of their principal amount in May 2010 for the 3 percent notes, and January 2011 for those at 4.875 percent. Approximately $294.3 million of the 3 percent and $143.5 million of the 4.875 percent notes are currently outstanding. Specific terms and conditions of the tender offers are included in the Offer to Purchase, dated Oct. 8, 2009, filed with the Securities and Exchange Commission today, SBGI said.

Sinclair also announced that it has entered into a Memorandum of Understanding with Cunningham Broadcasting Corp., contingent upon the refinancing of the notes. SBGI makes around $77 million a year from local marketing agreements with Cunningham, which defaulted on a loan over the summer. Sinclair cited Cunningham as a factor in its own potential bankruptcy--a possibility SBGI announced in July.

Sinclair also announced that it intends to issue second-lien notes in a private placement to finance the tender offers, the terms of which are different than the those negotiated with the ad-hoc committee representing certain holders of the notes, as previously disclosed. The ad hoc committee supports the terms of the tender offers.

Under the terms of the tender offers, notes validly tendered and not validly withdrawn on or before the expiration date, will be purchased at a purchase price of $980 per $1,000 in principal amount. Tendering holders will also receive accrued and unpaid interest from the last interest payment date to the settlement date.

The tender offers will be conditioned on, among other things, receipt of sufficient proceeds from the private placement. Sinclair intends to fund the cash tender offers with the net proceeds from the private placement of second lien notes and, if necessary, a draw on the revolving line of credit under its senior secured credit facility and/or cash on-hand.

The tender offers will expire at midnight Eastern Time, on Thursday, Nov. 5, 2009 unless extended or earlier terminated by Sinclair. Copies of the tender offer documents can be obtained by contacting MacKenzie Partners, the information agent for the tender offers, at 212-929-5500. J.P. Morgan Securities is acting as deal manager for the tender offers.

More on Sinclair:
July 15, 2009: “Analyst Deems Sinclair Bankruptcy ‘Remote’
“To be blunt, we think management is posturing. We believe that management is painting the most dire scenario in a public forum as part of its negotiations with convert holders. There are still 10 months before these converts can be put to the company.”

July 14, 2009: Sinclair Positions for Bankruptcy
Sinclair Broadcasting group may have to file for bankruptcy if it can’t renegotiate the terms of some of its debt. In a filing with the Securities and Exchange Commission dated July 10, the company said it had $488.5 million due over the next 18 months.

June 19, 2009Standard & Poor’s Cuts Sinclair
“We believe that sluggish TV advertising in a nonelection, recession year will cause Sinclair’s EBITDA to decline further and leverage to continue to rise,” wrote Deborah Kinzer, an S&P credit analyst. “The negative rating outlook reflects our concerns about the company's deteriorating credit metrics and its ability to refinance potential upcoming puts.” 


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