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Emmis Communications Corp. Message Board

  • blaine200844 blaine200844 Mar 29, 2011 8:24 PM Flag

    (Good) news

    Emmis Announces Amendment of its Credit Agreement

    Press Release Source: Emmis Communications Corporation On Tuesday March 29, 2011, 7:19 pm EDT
    INDIANAPOLIS, March 29, 2011 /PRNewswire/ -- Emmis Communications Corporation (Nasdaq:EMMS - News) today announced that it has entered into an amendment to its credit agreement after receiving the requisite consent of its lenders.

    "Today's announcement provides Emmis with a significant opportunity to address our capital structure and gives us the flexibility we need going forward as our business continues to grow and gain momentum," Jeff Smulyan, Chairman and CEO of Emmis, said.

    Among other things, the amendment, provides that (i) the terms of the existing Tranche B Term Loans held or purchased on or prior to the date of the amendment by funds or accounts managed by Canyon Capital Advisors LLC are amended into an amended tranche of term loans with an extended maturity date of November, 2014 and pricing on such amended term loans is increased pursuant to a grid under which 7.5% to 12.25% per annum is to be paid in cash and 7.0% to 0.0% per annum is to be paid in kind, subject to a minimum yield of 12.25% per annum, (ii) the leverage ratio and fixed charge covenants will not apply under the credit agreement until November 30, 2012, at which time they will be set at 5.0x and 1.15x for the life of the credit agreement and from November 30, 2011 through August 31, 2012 there will be a minimum EBITDA test of $25 million per rolling 4 quarter test period, (iii) the requirement that annual audits be certified without qualification will be waived for the fiscal years ending February 2011 and 2012 and (iv) the ability of Emmis to engage in certain activities or transactions, including the payment of dividends, the incurrence of indebtedness and the ability to invest certain proceeds including from asset sales will be further restricted or prohibited. The total amount of Tranche B Term Loans outstanding as of March 29, 2011 is $329 million, and the amount of such term loans that Canyon is amending into extended term loans is approximately $182.9 million.

    Prior to the entry into the credit agreement amendment, Emmis entered into a backstop letter agreement with Canyon, pursuant to which Canyon agreed to consent to the amendment to Emmis' credit agreement and to purchase loans necessary to provide the required lender consent to the amendment. In consideration of Canyon's entering into backstop letter agreement, Canyon will receive an exit fee of 6% (or 3% during the first 6 months after the amendment becomes effective) on all existing Tranche B Term Loans and revolving credit commitments held or purchased on or prior to the date of the amendment by funds or accounts managed by Canyon.

    The full terms of the applicable agreements will be filed with the U.S. Securities and Exchange Commission

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