McClatchy gets no tenders in offer to buy back up to $406 million of 9% notes at par

By Toni Weeks

San Luis Obispo, Calif., Nov. 12 – McClatchy Co. said that it received no tenders for the up to $406 million of outstanding 9% notes due 2022 that the company offered to repurchase at par.

The tender offer began on Oct. 14 and expired at 5 p.m. ET on Nov. 12.

As of June 30, the outstanding amount of notes was $900 million.

The offer was not subject to the receipt of any minimum amount of notes tendered.

As previously noted, the note indenture requires McClatchy to offer to buy back the notes with the after-tax proceeds of the sale of its interest in Cars.com. The company said any proceeds not used in the tender offer may be used for initiatives and/or investments to continue its digital transformation, to selectively repurchase outstanding notes or for other corporate purposes.

“Given that these 2022 notes are trading at a premium, well above their face value, we are not surprised that investors declined our offer to redeem the notes at par,” McClatchy chief financial officer Elaine Lintecum said in a press release.

According to a news release in mid-October, the notes had been trading at premium prices ranging from $111.00 to $112.50.

Following the expiration of the tender offer, the company will focus on completing its previously announced privately negotiated transactions to repurchase $259.35 million principal amount of its 9% notes and about $150 million principal amount of its 5¾% notes due 2017. The repurchases will be made under privately negotiated agreements reached on Nov. 5 with Chatham Asset Management, LLC and Leon G. Cooperman and Omega Charitable Partners, LP.

According to Lintecum, the total expected cash amount required to complete the transactions is $459.5 million, plus accrued interest.

The repurchase is subject to a condition that no more than $95.5 million of the 9% notes are submitted in the company’s asset purchase offer, which will expire on Nov. 12. If more than $95.5 million of the 9% notes are submitted in the offer, the amount of 9% notes and 5¾% notes subject to repurchase under the agreements will be reduced ratably for the amount in excess of $95.5 million.

The company expects to complete the repurchases on Nov. 13.

The tender and paying agent for the par tender offer was Bank of New York Mellon Trust Co., NA (800 254-2826).

McClatchy is a news and information provider based in Sacramento, Calif.

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