By Angela McDaniels
Tacoma, Wash., May 20 - Canwest Global Communications Corp. subsidiaries Canwest Media Inc. and Canwest Television LP will issue the U.S. dollar equivalent of C$105 million principal amount of 12% senior secured notes to some members of the ad hoc committee of 8% senior subordinated noteholders.
The purchasers will pay the U.S. dollar equivalent of C$100 million for the notes, according to a company news release. The transaction is expected to close Thursday.
As previously reported, Canwest Media did not make the $30.4 million interest payment due March 15 on the 8% notes. The noteholders agreed not to demand payment on their notes until April 21, and this was later extended to May 19.
On Wednesday, the noteholders extended the forbearance through June 15, subject to completion of the issuance of the 12% notes.
Canwest Media has agreed to reach an agreement in principle with the ad hoc committee about a recapitalization by June 15 and to enter into a definitive agreement by July 15.
The 12% notes, along with a C$75 million senior secured revolving asset-based loan facility being provided to Canwest Media by CIT Business Credit Canada Inc., are intended to give Canwest enough credit availability to operate its business as it continues its work out a recapitalization transaction.
Among other things, proceeds from the notes and the revolver will be used repay the lenders under Canwest Media's existing senior credit facility and to settle related obligations.
The lenders under the existing credit facility extended their waiver agreement until June 2 and also agreed to defer some payments totaling approximately C$10 million until June 2.
The waiver was originally obtained in February as a result of potential non-compliance with the quarterly financial leverage covenants for the second quarter.
Canwest Global is a Winnipeg, Manitoba-based media company.
| Issuers: | Canwest Media Inc. and Canwest Television LP
|
| Issue: | Senior secured notes
|
| Investors: | Members of ad hoc committee of 8% senior subordinated noteholders
|
| Amount: | U.S. dollar equivalent of C$105 million
|
| Coupon: | 12%
|
| Price: | 95.24
|
| Settlement date: | May 21
|
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