Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

American Media Lenders Will Swap Second-Lien Debt for PIK Notes

Sept. 27 (Bloomberg) -- Bondholders of American Media Inc. agreed to restructure most of the company’s $104.9 million in second-lien notes, according to a statement from the publisher of the National Enquirer.

Investors have agreed to exchange about 90 percent of the New York-based company’s 13.5 percent securities due in 2018 for a new series of 10 percent second-lien notes with a payment-in-kind feature, American Media said in the statement. Payment-in-kind borrowings allow the issuer to pay interest with additional debt.

The agreement may save American Media $12 million annually in cash interest payments, which the company will use to repurchase some of its first-lien bonds, according to the statement.

The second-lien notes were issued in December 2010, the same month American Media emerged from a prepackaged bankruptcy. The securities are rated CCC- by Standard and Poor’s, according to data compiled by Bloomberg.

American Media’s $362.6 million of 11.5 percent, first-lien notes due in December 2017 traded at 102.25 cents on the dollar to yield 10.81 percent on Sept. 23, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The second-lien bonds were quoted at face value to yield 13.48 percent at 11:00 a.m. today, according to prices compiled by Bloomberg.

To contact the reporter on this story: Callie Bost in New York at cbost2@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net;

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.