Friday, June 26, 2009

McClatchy debt exchange fizzles -- holders of just $103 million in debt agree to debt swap (updated)

McClatchy announced Friday its debt exchange offer has ended, and holders of approximately $103 million in debt -- far less than the $1.15 billion the company was hoping for -- agreed to the exchange.

Extending the offer a additional week netted an additional $1 million. Looks like McClatchy's march toward insolvency will resume.

Update: McClatchy treasurer Elaine Lintecum says the company reduced bond debt by over $100 million in the first half of 2009. (What she didn't say is whether that would be enough to keep the company afloat.)

Fitz and Jen report that newspaper analyst Mike Simonton isn't drawing an immediate conclusion about the low acceptance rate, but Simonton says the company is at risk of breaching bank covenants.

Simonton's quote:

“It does, however, diminish the prospects for an out of court solution to McClatchy's debt problem,” he said Friday. “There's risk that the company could breach it's bank covenants in the second half of 2009 or early 2010. Although the company has received relief from the banks several times, it's uncertain how future negotiations will play out given their deteriorating operating performance and rapidly escalating leverage metrics.”

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Update #2: Sacramento Bee article on the debt swap results here. (The comments are pretty funny.)

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25 comments:

H. Michael Sarkisian said...

If McClatchy folds, will that leave Sacramento with the Sacramento News & Review as its only newspaper?

McClatchy Watch said...

Michael -- if MNI enters bankruptcy it will be able to continue publishing but it will have to re-organize. Which means dumping the current leadership.

Ex -- The Star-Trib is in bankruptcy but is still publishing... they are dumping their leadership.

Anonymous said...

Sey, that's about....(calculator)....(slide rule)...(abacus)....um..

FRINKING TOAST

Anonymous said...

So they reduced their debt about $80 million total, but they paying 15% on the new debt.

This is a rounding error in terms of their overall financial picture.

Anonymous said...

If McClatchy folds, will that leave Sacramento with the Sacramento News & Review as its only newspaper?




McClatchy will not fold under bankruptcy but the Sacramento paper does happen to be a major money sink, leaving it subject to surgical removal. Any of their holdings in a competitive market would be at risk of being closed, sold or parted out.

Anonymous said...

Anybody care to elaborate on the consequences for McClatchy's recent discardees and pensioneers like myself?

Anonymous said...

and the bumbling CEO still has a job.....while the family still lives in wacko land.

Anonymous said...

As mentioned in the "comments" about the end of "The Great Bond Swap", the Miami land deal that did not close was going to net $115mil. Since it did not close, we had "The Great Spring Layoff" that was going to save app $110 mil. At that time, the quarterly payment on "The Debt" was app $139 mil. "The Bond Swap" fizzled. According to MW, this quarterly payment will be app $150 mil. Do the math, more cutbacks would not be a surprise.

Anonymous said...

Cutbacks (layoffs, budget whacking) is a certainty and before the end of the year. While the print side still pays the bills I could see McClatchy going all online with a skeleton staff and maybe coming out ahead on the deal. Infrastructure costs are huge and online pubs don't have to absorb the damage. Small buildings, few employees and streamlined costs. They may have to go this way to survive.

Anonymous said...

@ 9:31

Where did you get that number? Last quarter the interest was 32 million US$.

Anonymous said...

GO MELANIE GO.....

“It does, however, diminish the prospects for an out of court solution to McClatchy's debt problem,” he said.

Does this mean Melanie gets to go to court and say...."If it wasn't for this darn economy.." or "Let me quote jimmah carter, It's the economy stupid"

Anonymous said...

We lied to our readers for years and years, tried to emulate the ny times, and are nothing better than DNC whore shills, and all we got was this Chapter 11 T-shirt!

But it’s not our fault and it’s the economy. WAAAAAAAAAAAAAAAHH

Anonymous said...

If McClatchy folds then finally the dinosaurs in corporate can go back to the museums where they belong. And no, you won't be missed by anyone under the age of 70.

Anonymous said...

@ 11:07

Saw those numbers at MW

Anonymous said...

@ 12:05

This is what I like here. People are only bashing and if they find something negative it will be posted no matter how silly it is. Have you calculated 150 million quarterly interest on 2 billion debt? That adds up to 30% interest rate. Does this sound suspicious to you? I do not think so, because otherwise you would have rechecked the number.


@ 8:37

Let's see: they bought appr. 100 million face value with an average interest of 6% and issued 24.2 million new debt with an interest of 15.75%.
Old interest: 6 million versus
New interest: 3.8 million

So where exactly is the rounding error?

Anonymous said...

Figures don't lie...but liars figure!

Anonymous said...

12:33 Twit

Anonymous said...

12:32 PM I see the market loves your math.

McClatchy down 19% at the bell. LOL

Anonymous said...

The stock is down 20%. What a big surprise. Honey this stock will under pressure until the second quarter numbers show improving numbers for EBITDA and FCF.

Anonymous said...

The stock closed .22 down compared to yesterday's close(.68 vs .46).

Something like 32%

Man the lifeboats

Anonymous said...

Honey this stock will under pressure until the second quarter numbers show improving numbers for EBITDA and FCF.



No, this stock is finished, done, kaput. No second quarter numbers are going to save it from RD. Only a judge and new management can possibly do that.

Anonymous said...

BE STILL MY BEATING HEART!

"No, this stock is finished, done, kaput." "Only a judge and new management can possibly do that."

(SMACKING LIPS, ROLLING EYES)

Anonymous said...

@ 1:49

In your dreams. In a few months you will be proved dead wrong.

Target price per share: 3 US$

Anonymous said...

2:40 PM

You're either completely illiterate or just simply stupid.

What part of default don't you understand?

Anonymous said...

Anybody care to elaborate on the consequences for McClatchy's recent discardees and pensioneers like myself?

********************

We might be screwed since MNI's pension is only funded to 80 something percent. Many recent discardees and current employees have not been able to get a straight answers from Corporate regarding their pensions security.

All I know is that after all my years busting my ass for the Company somebody is going to pay me.... one way or another.