ION Media issues more 11% convertibles, 12% preferreds in exchange for 13.25% preferreds

By Angela McDaniels

Tacoma, Wash., Jan. 7 - ION Media Networks, Inc. said it exchanged 572 shares of its outstanding 13.25% cumulative junior exchangeable preferred stock, currently accruing dividends at 14.25%, for $3.56 million of its 11% series A mandatorily convertible senior subordinated notes due 2013 and 91.52 shares of its 12% series B mandatorily convertible preferred stock with a total stated liquidation preference of $915,200.

Each 13.25% preferred was exchanged for $6,230 of series A notes and $1,600 stated liquidation preference of series B preferreds.

The exchanges occurred on Dec. 31 and Jan. 3, according to an 8-K filing with the Securities and Exchange Commission.

On Dec. 21, the company reported that it exchanged 3,975 shares of the 13.25% preferreds for $24.76 million of the series A notes and $6.36 million of the series B preferreds.

In July, holders exchanged 90.6% of the 13.25% preferreds for series A notes and series B preferreds in an exchange offer held in connection with the company's recapitalization plan. Under the plan, ION was taken private by affiliates of Citadel Investment Group, LLC and NBC Universal, Inc.

The series A notes and series B preferreds are convertible into class D non-voting common shares at a price of $0.90 per share. The conversion price will increase each year by 11% for the series A notes and by 12% for the series B preferreds.

Beginning Aug. 3, 2008, the series A notes and series B preferreds will be mandatorily converted if the trading price of the company's common shares hits the trigger price for 15 consecutive trading days or if the company issues $75 million or more of common stock at a price per share greater than or equal to the then-applicable conversion price. The trigger price equals 102% of the conversion price until Aug. 3, 2009, 101% of the conversion price until Aug. 3, 2010 and 100% of the conversion price after that.

ION is a network television broadcast company based in West Palm Beach, Fla.

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