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Sinclair Announces Extension Of Early Tender Time For The Private Debt Exchange Offer And Consent Solicitation Of Diamond Sports Group

BALTIMORE, May 27, 2020 /PRNewswire/ -- Sinclair Broadcast Group, Inc. ("Sinclair" or the "Company") (Nasdaq: SBGI) today announced that its indirect subsidiaries, Diamond Sports Group, LLC and Diamond Sports Finance Company (together, the "Issuers"), have amended their previously announced private offer to exchange (the "Exchange Offer") any and all of the Issuers' outstanding 6.625% Senior Notes due 2027 (the "Senior Notes") for newly issued 12.750% Senior Secured Notes due 2026 (the "New Secured Notes") (CUSIP/ISIN 25277LAE6 / US25277LAE65; U2527JAC9 / USU2527JAC90) and a cash payment upon the terms and conditions set forth in the Confidential Offering Memorandum, Offer to Exchange and Consent Solicitation Statement, dated as of May 12, 2020 (the "Offering Memorandum" and, together with the accompanying letter of transmittal, the "Offer Documents") to extend the early tender time through 5:00 p.m., New York City time, on June 1, 2020 (as extended hereby and subject to further extension, the "New Early Tender Time").

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Holders that validly tender their Senior Notes prior to the New Early Tender Time and on or before June 9, 2020 (unless earlier terminated or extended, the "Expiration Time") will receive the total consideration set out in the applicable column in the table below. Withdrawal rights for the Exchange Offer expired at 5:00 p.m., New York City time, on May 26, 2020, and, accordingly, Senior Notes validly tendered and not validly withdrawn in the Exchange Offer may no longer be withdrawn except as required by law.



Consideration per $1,000 Principal Amount of Senior Notes Tendered

CUSIP/ISIN

Outstanding Principal
Amount of Senior Notes (1)

Total Consideration if Tendered prior
to or at the New Early Tender Time (2)

Total Consideration if Tendered
after the New Early Tender Time (2)

25277LAC0 /

US25277LAC00;

U2527JAB1 / USU2527JAB18

$1,820,308,000

$467 in aggregate principal amount of New Secured Notes and $133 in cash

$467 in aggregate principal amount of New Secured Notes and $103 in cash


(1) The number in the column includes the Senior Notes that have been validly tendered and not validly withdrawn as of 5:00 p.m., New York City time, on May 26, 2020.

(2) Additionally, Eligible Holders of the Senior Notes that are validly tendered at or prior to the New Expiration Time and accepted for exchange will receive accrued and unpaid interest, if any, from the last interest payment date up to, but not including, the settlement date and will not be entitled to receive an interest payment on such Senior Notes on August 15, 2020. 

 

As previously disclosed, the Issuers continue to explore ways to optimize the Issuers' capital structure which may include, without limitation, other debt exchange transactions, receivables financings and/or other financings or similar transactions involving designating subsidiaries as "unrestricted subsidiaries" (in which case assets owned or held by such unrestricted subsidiaries would not be collateral securing the New Secured Notes, the Issuers' 5.375% Senior Secured Notes due 2026 (the "Existing Secured Notes"), or obligations under the Issuers' credit agreement and such unrestricted subsidiaries would not be restricted by the indentures that govern, or will govern, the New Secured Notes and the Existing Senior Notes or the Issuers' credit agreement).  In particular, Diamond Sports Holdings, LLC, an indirect parent of the Issuers ("DSH"), is considering the use of any cash proceeds of any such financings or of existing cash of the Issuers not used in connection with Exchange Offer to redeem units of DSH's preferred equity.

Also as previously disclosed, concurrently with the Exchange Offer, the Issuers are soliciting consents ("Consents") from Eligible Holders of the Senior Notes (the "Consent Solicitation") to amend (the "Proposed Senior Notes Amendments") the indenture governing the Senior Notes (the "Senior Notes Indenture"). The Proposed Senior Notes Amendments would eliminate most of the restrictive covenants and certain of the events of default contained in the Senior Notes Indenture. The Issuers must receive Consents from holders of a majority in aggregate principal amount of outstanding Senior Notes not owned by the Issuers or any of their affiliates to adopt the Proposed Senior Notes Amendments. Holders who validly tender their Senior Notes will be deemed to consent to the Proposed Senior Notes Amendments, and holders may not deliver Consents to the Proposed Senior Notes Amendments without validly tendering their Senior Notes in the Exchange Offer.

Except as provided for in this release, all other terms and conditions of the Exchange Offer and Consent Solicitation remain unchanged as set forth in Offer Documents.

The Exchange Offer and Consent Solicitation, including the Issuers' acceptance of validly tendered Senior Notes and payment of the applicable consideration, is conditioned on the satisfaction or waiver of certain conditions, as described in the Offer Documents. The Exchange Offer and Consent Solicitation is not conditioned upon the tender of a minimum principal amount of Senior Notes. The Issuers may terminate, withdraw, amend or extend the Exchange Offer and/or Consent Solicitation in their sole discretion.

The Exchange Offer is being made, and the New Secured Notes are being offered and issued, only to holders of Senior Notes who are reasonably believed to be (i) "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") or (ii) not U.S. persons (as defined in Regulation S under the Securities Act) or purchasing for the account or benefit of U.S. persons, other than a distributor, and are purchasing the New Secured Notes in an offshore transaction in accordance with Regulation S. The holders of Senior Notes who are eligible to participate in the Exchange Offer pursuant to the foregoing conditions are referred to as "Eligible Holders." Only Eligible Holders are authorized to receive or review the Offering Memorandum or to participate in the Exchange Offer and Consent Solicitation.

The Offer Documents will be distributed only to holders of Senior Notes that complete and return a letter of eligibility confirming that they are Eligible Holders. Copies of the eligibility letter are available to holders through the information and exchange agent for the Exchange Offer, Ipreo LLC, at (888) 593-9546 (U.S. toll-free) or (212) 849-3880 or ipreo-exchangeoffer@ihsmarkit.com. Moelis & Company LLC is acting as dealer manager in connection with the proposed Exchange Offer and Consent Solicitation. Eligible Holders of Senior Notes may contact Moelis at 212-883-3800 with questions they may have regarding the Exchange Offer and Consent Solicitation. 

The Exchange Offer and Consent Solicitation is made only by, and pursuant to the terms of, the Offer Documents, and the information in this news release is qualified by reference thereto.

This press release shall not constitute an offer to sell or the solicitation of an offer to exchange or purchase the New Secured Notes or any other securities, nor shall there be any offer or exchange of the New Secured Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.  In addition, this press release is neither an offer to exchange or purchase nor a solicitation of an offer to sell any Senior Notes in the Exchange Offer or a solicitation of Consents to the Proposed Senior Notes Amendments.

The New Secured Notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.  Accordingly, the New Secured Notes are being offered for exchange only to persons reasonably believed to be (i) "qualified institutional buyers" (as defined in Rule 144A under the Securities Act or (ii) not U.S. persons (as defined in Regulation S under the Securities Act) or purchasing for the account or benefit of U.S. persons, other than a distributor, and are purchasing the New Secured Notes in an offshore transaction in accordance with Regulation S.

Forward-Looking Statements:

The matters discussed in this news release include forward-looking statements regarding, among other things, future events and actions. When used in this news release, the words "outlook," "intends to," "believes," "anticipates," "expects," "achieves," "estimates," and similar expressions are intended to identify forward-looking statements.  Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including and in addition to the assumptions set forth therein, but not limited to, the potential impacts of the novel coronavirus (COVID-19) pandemic on our business operations, financial results and financial position and on the world economy, the impact of changes in national and regional economies, our ability to generate cash to service our substantial indebtedness, the completion of the FCC spectrum repack, successful execution of outsourcing agreements, pricing and demand fluctuations in local and national advertising, volatility in programming costs, the market acceptance of new programming, the successful execution of retransmission consent agreements, the successful execution of network and MVPD affiliation agreements, the successful execution of media rights agreements with professional sports teams, the impact of OTT and other emerging technologies and their potential impact on cord-cutting, the impact of MVPDs, vMVPDs, and OTT distributors offering "skinny" programming bundles that may not include all programming of our networks, our ability to identify and consummate acquisitions and investments and to achieve anticipated returns on those investments once consummated, the impact of pending and future litigation claims against the Company, the impact of FCC and other regulatory proceedings against the Company, uncertainties associated with potential changes in the regulatory environment affecting our business and growth strategy, and any risk factors set forth in the Company's recent reports on Form 10-Q and/or Form 10-K, as filed with the Securities and Exchange Commission. There can be no assurances that the assumptions and other factors referred to in this release will occur. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.

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SOURCE Sinclair Broadcast Group, Inc.