McClatchy accepts $300 million total notes in tender for 9 7/8% debentures, 7 1/8%, 4 5/8% notes

By Jennifer Chiou

New York, May 22 - McClatchy Co. announced that it accepted the maximum $300 million of securities in its tender offer for up to the same amount of its outstanding notes and debentures.

The offer included up to $150 million of its $200 million of outstanding 9 7/8% debentures due April 15, 2009; up to $130 million of its $300 million of outstanding 7 1/8% notes due June 1, 2011; and up to $50 million of its $200 million of outstanding 4 5/8% notes due Nov. 1, 2014.

At the end of the offer, the company said it obtained tenders from holders of $153.37 million of its 9 7/8% debentures and accepted $150 million of the tenders; $183.46 million of its 7 1/8% notes and accepted $130 million of the tenders; and $20.50 million of its 4 5/8% notes and accepted $20 million of the tenders.

The securities were listed in priority of acceptance. Previously, the company had said it would accept up to a total of $250 million of tendered notes and the cap for the 7 1/8% notes was lifted from $100 million.

As of the early tender deadline at 5 p.m. ET on May 6, the company said it obtained tenders from holders of $153.25 million of its 9 7/8% debentures, $178.04 million of its 7 1/8% notes and $20.47 million of its 4 5/8% notes.

The offer expired at 5 p.m. ET on May 21. It began on April 23.

McClatchy said the payouts for each $1,000 principal amount of securities that were tendered by the early deadline was $1,010 for the 9 7/8% debentures, $900 for the 7 1/8% notes and $700 for the 4 5/8% notes.

For securities tendered after the early deadline, those amounts were reduced by $25.00 per $1,000 principal amount.

Holders also received accrued interest up to but excluding the settlement date.

Tenders could have been withdrawn up to, but not after, the early deadline.

Because the company received tenders for more than $300 million of the securities, the company accepted up to the maximum amount of 9 7/8% debentures before accepting any 7 1/8% notes and up to the maximum amount of 7 1/8% notes before any 4 5/8% notes.

Tendered securities within each series were accepted on a pro-rated basis.

"We are pleased with the results of the tender offer. The oversubscription to the offer is clearly a reflection of a win-win transaction for the company and its bond holders," Pat Talamantes, McClatchy's chief financial officer, said in a news release.

"We were able to reduce debt by $17.5 million and lower our ongoing interest costs, and expect to record a $19.5 million pre-tax gain on the extinguishment of this debt. We will continue to focus on debt reduction and expect debt to be in the $2 billion range by the end of 2008."

J.P. Morgan Securities Inc. was the dealer manager (contact liability management group at 866 834-4666 or collect 212 834-4077). Global Bondholder Services Corp. was the information agent (866 477-3900 or collect 212 430-3774).

McClatchy is a newspaper company based in Sacramento.

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