Sinclair’s LMA Partner Gets Extension

HUNT VALLEY, MD.: Cunningham Broadcasting, a management partner of Sinclair Broadcast Group, received an extension on its $33.5 million loan due July 31. The company now has until Oct. 30, providing it makes $200,000 principal payments on each of its term loans on the first business day of August, September and October.

“During this time, the lenders and Cunningham will work towards a resolution on how to satisfy the debt maturity. Sinclair operates six television stations on behalf of Cunningham pursuant to local marketing agreements,” Sinclair (NASDAQ: SBGI) said.

Sinclair warned in mid-July that Cunningham’s condition was a crucial element in whether it would file for bankruptcy. Sinclair has local-marketing agreements with Cunningham that generate around $77 million a year. Cunningham, majority owned by the same family that runs Sinclair, had warned that it faced bankruptcy at the end of July when the loan in question came due.

July 14, 2009: “Analyst Deems Sinclair Bankruptcy ‘Remote’”
“To be blunt, we think management is posturing,” Wachovia’s Marci Ryvicker said. “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, 2009: Standard & 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.”