Sinclair Borrows $500 Million To Keep Cunningham Out Of Bankruptcy

Sinclair Broadcasting Group is borrowing $500 million in senior secured lien notes to pay fees and expenses related to the restructuring of its marketing agreements with Cunningham, keeping the company solvent, RBR/TBR reports.

Cunningham, which operates six TV stations under a local marketing agreement with Sinclair, owed more than $30 million that needed to be repaid by the end of July or risk dragging not just Cunningham but Sinclair into bankruptcy. Cunningham instead received an extension and would be able to refinance its debt if it could prove it could repay its obligations within three years. To meet that goal, Sinclair restructured its marketing agreements with Cunningham to inject cash into the company—$29.1 million in ten quarterly installments, all of which will be used to pay down debt, but will be credited toward the purchase price of the stations if antitrust laws are ever relaxed enough that Sinclair can purchase them.

Phew. Mouthful.

Sinclair will announce its Q3 earnings Nov. 4.

The funds from this $500 million debt securities offering will also be used to fund Sinclair’s convertible notes and to refinance its Television Group’s existing debt.

Publish date: October 19, 2009 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT