Education Management up with IPO; Local TV holds firm on consolidation news

By Sara Rosenberg

New York, Dec. 24 - Education Management Corp.'s term loan was stronger on the back of an initial public offering announcement, and Local TV LLC's term loan was steady in a quiet pre-holiday market on Monday after news emerged that the company will help manage some new television stations that are being acquired by its equity sponsor.

Education Management's term loan headed higher as lenders are anticipating a paydown from the proceeds of the company's proposed IPO, according to a trader.

The term loan was quoted at 97 bid, 99 offered, up from previous levels of around 95 bid, 96 offered, the trader said.

Late Friday, Education Management filed an S-1 with the Securities and Exchange Commission announcing plans for its IPO.

The company said that proceeds from the stock offering will be used to repay a portion of its debt, including accrued interest and prepayment penalties, to pay the termination fee under a sponsor management agreement and for general corporate purposes.

The company did not reveal how many shares of stock it plans to see in its IPO or how much in proceeds it expects to generate.

Education Management is a Pittsburgh-based provider of private post-secondary education.

Local TV steady on acquisition

Local TV's term loan held firm during the session as its sponsor, Oak Hill Capital Partners, announced the acquisition of eight television stations from News Corp. for approximately $1.1 billion in cash, according to a trader.

This portfolio of stations, which includes KDVR in Denver, KSTU in Salt Lake City, KTVI in St. Louis, WBRC in Birmingham, Ala., WDAF in Kansas City, Mo., WGHP in Greensboro, N.C., WITI in Milwaukee and WJW in Cleveland, will be jointly managed by Local TV.

To help fund the acquisition, Oak Hill has received a debt financing commitment from Deutsche Bank, UBS Securities, Bank of America and BNP Paribas.

The transaction is expected to close in the third quarter of 2008, subject to regulatory and other customary approvals.

Following the news, Local TV's term loan was quoted at 94 bid, 95 offered, unchanged from Friday's levels.

Late last week, the paper did pop up by about half a point after Local TV revealed that it has entered into a letter of intent with Tribune Co. to create a third-party broadcast management company that will provide shared services to all of the stations Local TV and Tribune own, respectively.

The third-party broadcast management company will function as a wholly owned subsidiary of Tribune and will provide back-office services, administration and a number of other functions to the stations with the goal of maximizing efficiencies, sharing best practices and fostering innovation.

Also, Local TV announced last week that it named Bobby Lawrence as its new chief executive officer. Its previous CEO, Randy Michaels, left to go to Tribune to act as executive vice president and CEO of that company's interactive and broadcasting division.

Lawrence previously held the position of president and chief operating officer of Local TV.

Local TV is the Covington, Ky.-based television platform Oak Hill created earlier this year to acquire nine stations from the New York Times Co.

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