Postmedia gets consent to issue C$140 million add-on to 8¼% notes

By Susanna Moon

Chicago, Oct. 31 – Postmedia Network Canada Corp. said it obtained consents from holders of about 97% of its 8¼% senior secured notes due 2017 to issue add-on notes to fund its planned acquisition of a stable of newspapers.

As a result, the company issued C$140 million of 8.25% debt subscription receipts exchangeable for 8¼% senior secured notes due 2017, according to a company press release.

On Oct. 6, the company said an existing noteholder, who owns more than 50% of the 8¼% notes, had agreed to purchase subscription receipts representing the entire amount of the additional notes.

The subscription receipts are exchangeable into the 8¼% notes upon closing of the acquisition.

The consent solicitation was announced Oct. 6.

The amendments needed to be approved by holders of a majority of the outstanding notes, the company said.

The company will purchase Sun Media Corp.’s stable of 175 English-language newspapers, specialty publications and digital properties from Quebecor Media Inc.

The subscription receipts will bear interest at the same rate as the notes and will automatically be exchanged for the additional notes on completion of the acquisition, for no additional payment.

The Don Mills, Ont., holding company publishes paid English-language daily newspapers through its subsidiary, Postmedia Network Inc.

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