It seems to imply a reduction in interest rates on the debt coming this summer (in the absence of a LIBOR increase). Has anyone seen reference to this provision in previously released documents? I haven't seen it, but then I have not dug into SEC-filed documents. Anyone able to quantify the change in rates? It certainly sounds interesting.
I was puzzled by this sentence as well. If anything, interest rates are going up with the Pulitzer rates increasing 0.75%.
Maybe they are hinting at calling the second lien, which they can do on January 31?
I was puzzled as well at first - but after analysis believe that it refers to nothing more than the year-over-year quarterly comps. If you look at the Q1 release, it shows the Q1 FY 9/30/13 interest expense as roughly 2x the Q1 amount for FY 9/30/12. For Q2 ending in March, the result will be similar though less pronounced since Lee emerged from bankruptcy in January, 2012 and began paying the higher interest rates later in that quarter. In the June, 2013 Quarter, Lee will have been under the new post-bankruptcy interest rates for a full year and will have paid down debt - making the YOY interest comparisons favorable (assuming a flat LIBOR).
I must say I have been surprised by the lack of comments on earnings. While clearly not a blow-out great quarter, there is an emerging set of positives.....with NCF margin increasing slighty, sub revenues increasing, and digital/mobil up from lower base levels. Better than the kick in the shorts of more recent quarters - and the market seems to be slowly recognizing and embracing. The sale of the HI newspaper (only $2 million) was also @ a good OCF multiple (20x). The company is operating on the razor's edge of shareholder equity, but continued favorable trends in operating measures has the potential to significantly increase the equity value...in particular if something can be done with the second lien debt - which you know has to be at the top of management#$%$ list.