Lee Enterprises Seeks to Pay Down Secured Loans to Reduce Debt
Lee Enterprises Inc. (LEE), the owner of local newspapers in the U.S. Midwest and West Coast, is seeking to repay secured obligations to reduce its debt load.
The owner of the St. Louis Post-Dispatch may target a $621 million term loan that matures in December 2015, paying interest at 6.25 percentage points more than the London interbank offered rate, according to Carl Schmidt, chief financial officer of the Davenport, Iowa-based company.
Lee, which completed a bankruptcy reorganization in January 2012, is planning to reduce the ratio of its total debt to earnings before interest, taxes, depreciation and amortization to less than 2 times, Schmidt said in a July 25 telephone interview. The company’s leverage was 5.4 times as of March 31, according to data compiled by Bloomberg.
“We’re continuing to monitor the credit markets and talk with bankers to see what our options are,” Schmidt said. The company will seek to refinance the term loan by 2015 at the latest, he said.
The first-lien obligation, which was arranged by Deutsche Bank AG and Goldman Sachs Group Inc., was quoted at 99.1 cents on the dollar today, Bloomberg prices show.
Lee had $876.1 million of total debt as of March 31, down from $1.4 billion in the third quarter of 2008, Bloomberg data show. Net income dropped $16.7 million in 2012, narrower than the $146.9 million loss in the prior year.
“We’ve been very focused on paying down debt and have been aggressively doing that,” Schmidt said. “We would expect to continue to do that.”
To contact the editors responsible for this story: Alan Goldstein at email@example.com