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Lee Enterprises, Incorporated Message Board

  • joe_omaha_11 joe_omaha_11 Jul 30, 2013 7:43 AM Flag

    Press release....why? ...just state the obvious, imo

    Lee Enterprises, the owner of local newspapers in the U.S. Midwest and West Coast, is seeking to repay secured obligations to reduce its debt load.

    The owner of the St. Louis Post-Dispatch may target a $621 million term loan that matures in December 2015, paying interest at 6.25 percentage points more than the London interbank offered rate, according to Carl Schmidt, chief financial officer of the Davenport, Iowa-based company.

    Lee, which completed a bankruptcy reorganization in January 2012, is planning to reduce the ratio of its total debt to earnings before interest, taxes, depreciation and amortization to less than 2 times, Schmidt said in a July 25 telephone interview. The company’s leverage was 5.4 times as of March 31, according to data compiled by Bloomberg.

    “We’re continuing to monitor the credit markets and talk with bankers to see what our options are,” Schmidt said. The company will seek to refinance the term loan by 2015 at the latest, he said.

    The first-lien obligation, which was arranged by Deutsche Bank AG and Goldman Sachs Group Inc., was quoted at 99.1 cents on the dollar today, Bloomberg prices show.

    Lee had $876.1 million of total debt as of March 31, down from $1.4 billion in the third quarter of 2008, Bloomberg data show. Net income dropped $16.7 million in 2012, narrower than the $146.9 million loss in the prior year.

    “We’ve been very focused on paying down debt and have been aggressively doing that,” Schmidt said. “We would expect to continue to do that.”

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    • Do you think this was a press release? LEE doesn't list it as a release on its web-site. Also, the aforementioned Bloomberg article references a phone interview on July 25. Who initiated the media contact - Bloomberg reporter or Carl? In any case, I wish the reporter had asked King Carl about the avenue to that Debt:EBITDA of 2.0.

    • Of course we are trying to refinance the debt and diffuse this ticking time bomb.

      I still think there is a good chance we do some convertible debt, enticing someone (eg, WEB) to take a lower interest rate in exchange for the appreciation (and maybe control of LEE).

      That the debt is selling close to PAR (99.1 cents) tells you people are not climbing over one another to buy it at its current rate. Partly because it is callable. Partly because there is still a lot of risk here.

      • 1 Reply to joe_omaha_11
      • Golly, you say "Partly because there is still a lot of risk here." IT seems that folks are voting with their hard earned dollars that you are wrong. You guys have been talking this game ever since LEE was priced down in the 1.30s..."the sky is falling" "there is too much risk" and trying to make micro pricing predictions...And LEE just slowly and surely;ve been around since lee touched .50, today it is over three. I've been around too, up over 300%. Maybe you should rethink your method of valuing stocks?

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