The 6.75% notes are non-callable and mature in May 2013. The 8% notes due Nov 2016 can't be called until Nov 2013. Both these issues are trading at large premiums in the 2ndary market (107 and 110, respectively) making it not cost effective to purchase in the open market. The 7.75% notes (2 tranches - combined $440mm) are due in June and Sept 2027. These are old investment grade notes with no covenants and relatively cheap capital for a 16+ year remaining maturity. But, they do trade at fairly deep discounts (in the 90-92 range) due to the lack of covenants. I guess they could buy-back these old IG notes that are yielding in the high-8% range and then use a new bank deal in 2013 to refi the 2013 maturity. As a shareholder I'd rather they pay to get waivers under the current facility and then use the FCF and cash on the balance sheet to pay a larger dividend and/or repurchase shares at these deep discounted prices.... much better use of capital IMO. But given how conservative (sleepy) this management team and board are, don't bet on this happening anytime soon.
I'm dissapointed in BLC not getting a little better terms for what we still owe. The remainder of their debt is 7.25 to 8%. As cheap as money has been and with the little debt we owe you would think we would have refinanced. Of course, if the bulk of our debt holders are BLC founding members and friends of the family then maybe that is why we sat on our butt through this. They are happy with the return and they make the decisions.
Q2 operating performance will be weaker than Q1, but that should already be priced in. Q3 starting weak as well, but picking up a bit.
Perhaps more importantly for the leveraged broadcast sector is today's news about the re-cutting of the $2B bank deal that JPM is doing for Cumulus to finance the Citadel transaction. Old deal talk was L+375 to L+400 for full $2B.... Now, new deal is broken into first and second lien tranches, with the 1st lien = L+425 to L+450 and a Libor floor of 125bp and expected pricing at 99. The 2nd lien tranche is talked at L+600 with a 150bp libor floor and priced at 98.5. The banking market still pushing back against the more levered broadcast companies and general thought is that financing costs will be higher than anticipated as facilities are rolled. Think this line of thinking is vastly overdone. For companies like BLC that have leverage in check and lots of flexibility, they should be able to tap bank market on much better terms later this year. Witness Saga's bank facility which was done 1 month ago and priced at L+250 (50bp cheaper than their old deal), with relaxed covenants.
Yep. You won't see that much at BLC for this quarter because there is a significant interest payment made each year during 2nd quarter. At TVL you should see them add about 11 million this quarter. They spent 6 million on the two CW's they bought in April. Starting 3rd quarter you'll see more cash build at each station.
Remember BLC will recieve a 30 million dollar tax refund from the government in August. Beginning in 3rd quarter we'll st art seeing some real cash going in our bank accounts at both.