Sinclair issues $1.43 billion in new notes, amends credit agreements

Sinclair, Inc. and its subsidiary Sinclair Broadcast (NASDAQ:SBGI) Group, LLC, a media company with $3.37 billion in annual revenue, have taken significant steps to restructure their substantial $4.29 billion debt burden and enhance their financial position.

On Monday, Sinclair Television Group, Inc., a subsidiary of Sinclair, Inc., issued $1.43 billion of 8.125% First-Out First Lien Secured Notes due 2033, which are set to mature on February 15, 2033.

According to InvestingPro data, this debt restructuring is crucial as the company operates with significant leverage, though it maintains liquid assets exceeding short-term obligations.

The proceeds from this private placement, in conjunction with the company’s cash on hand, are intended to repay existing obligations under Sinclair’s term loans and to execute the repurchase of certain outstanding notes, while covering related transaction fees and expenses.

The newly issued notes will pay interest semi-annually and can be redeemed early under certain conditions outlined in the indenture agreement. This move is part of a broader transaction that includes amendments to Sinclair’s existing credit arrangements and the issuance of new credit facilities. With a current ratio of 1.91, InvestingPro analysis shows the company maintains healthy short-term liquidity despite its debt load.

Specifically, Sinclair has entered into a Seventh Amendment to its existing credit agreement, which includes the subordination of certain liens and the removal of numerous covenants and default events. The company also established a new credit agreement that provides for up to $575 million in a first-out first lien revolving credit facility, which includes a letter of credit sub-facility and a swing-line sub-facility.

Moreover, Sinclair has negotiated the exchange of existing notes for new second-out first lien secured notes and senior secured second lien notes, with the latter carrying an interest rate of 9.750% per annum and maturing in 2033. These transactions are part of a comprehensive strategy to recapitalize debt and strengthen the balance sheet for long-term growth. The company has also conducted private debt repurchase agreements as part of this financial restructuring.

The issued notes have not been registered under the Securities Act of 1933 and are being offered only to qualified institutional buyers and non-U.S. persons in compliance with applicable regulations. No registration rights are associated with these notes.

These financial maneuvers are disclosed in accordance with SEC regulations and do not constitute an offer to sell or a solicitation of an offer to buy any securities. This article is based on a press release statement and provides a factual account of Sinclair, Inc.’s recent financial activities. InvestingPro analysis suggests the stock is currently undervalued, trading at $14.38 with a high EV/EBITDA multiple of 30.51x. For deeper insights into Sinclair’s financial health and detailed valuation metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Sinclair, Inc. has embarked on a significant financial restructuring. The company has issued $1.43 billion in new secured notes and amended its existing credit facilities. A subsidiary, Sinclair Broadcast Group, LLC, also issued 8.125% First-Out First Lien Secured Notes due 2033.

Additionally, Sinclair Television Group, Inc. conducted an exchange offer for its existing 4.125% Senior Secured Notes due 2030, resulting in new 4.375% Second-Out First Lien Secured Notes due 2032, totaling approximately $267.2 million.

Benchmark analyst Daniel L. Kurnos maintained a Buy rating on Sinclair Broadcasting Group, following the company’s announcement of plans to address its impending debt situation. The broadcaster revealed efforts to restructure its capital, potentially averting near-term maturity concerns by extending significant debt maturities to 2029.

In other recent developments, Sinclair has implemented a series of executive promotions within its corporate structure and various subsidiaries. Moreover, Sinclair has introduced AMP (OTC:AMLTF) Sales & Marketing Solutions and AMP Media, initiatives designed to broaden the company’s reach and modernize its engagement with clients and audiences.

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