Granite enters $70 million loan, makes June 1 interest payment on 9¾% notes to cure default

By Caroline Salls

Pittsburgh, July 5 - Granite Broadcasting Corp. entered into a new $70 million senior credit facility and used $19.9 million of tranche B proceeds to pay the interest due June 1 on its 9¾% senior secured notes, according to a company news release.

The interest payment on the notes cured the event of default under the notes indenture.

As previously reported, the facility includes a $40 million tranche A term loan and a $30 million convertible tranche B term loan.

The tranche B loan is convertible into a total of 200,000 shares of the company's 12¾% cumulative exchangeable preferred stock.

Both term loans mature on Dec. 1.

In connection with the facility, the note indenture was amended.

The company's proposed sales of its San Francisco and Detroit stations have not closed.

Proceeds from these sales were to be used to fund the company's proposed purchase of WBNG, Channel 12, the CBS-affiliated television station serving Binghamton and Elmira, N.Y.

According to the release, the Binghamton transaction is expected to close in July.

Proceeds from the tranche A term loan of the new facility will be used, if necessary, to fund the WBNG acquisition if the sales of the San Francisco and Detroit stations have not closed.

A portion of the remaining proceeds of the tranche B loan may also be used to pay part of the WBNG purchase price, if necessary.

The company said it expects to continue working with its strategic adviser, Houlihan Lokey Howard & Zukin, to evaluate the alternatives that will enable it to move forward with its strategic plans.

Even if the company is successful in closing the station sales and the WBNG purchase, Granite said it will continue to require a financial restructuring of its balance sheet, which it has committed to do soon under the new facility.

The company said it will consider all potential restructuring alternatives, including a restructuring under Chapter 11 of the Bankruptcy Code.

Granite is a New York-based owner and operator of network-affiliated television stations.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.