McClatchy, a publishing company based in Sacramento, CA, entered into a term sheet framework agreement with Chatham Asset Management for a $250 million tranche A term loan facility and an approximately $168.5 million tranche B term loan facility.
According to a related 8-K filing, Chatham and McClatchy agreed to the terms of a credit arrangement whereby Chatham will make loans to a wholly-owned subsidiary of the company which will be the same subsidiary that will incur the new lien first debt in connection with the refinancing. The loans plus certain premiums set forth in the framework agreement will be used to repurchase approximately $82.1 million aggregate principal amount of the company’s 7.15% debentures due November 1, 2027 and approximately $274 million aggregate principal amount of the 6.875% debentures due March 15, 2029, with the remaining proceeds used for refinancing the company’s 9.00% senior secured notes due 2022.
Amounts borrowed under the tranche A term loan facility will bear interest at a rate of 7.372% per annum and mature on July 1, 2030. Amounts borrowed under the tranche B term loan facility will bear interest at a rate of 6.875% and mature on July 1, 2031. Interest under the facilities will be payable semi-annually in arrears and calculated on the basis of 12 months of 30 days each.
Amounts borrowed under the tranche A term loan will be secured by the same collateral securing the new first lien debt, and such liens will be subordinated to liens securing the new first lien debt and certain other first lien debt of the company and its subsidiaries. The liens securing the loans extended under the tranche B term loans will be subordinated to the liens securing the new first lien debt, the tranche A term loan facility and certain other first lien debt of the company and its subsidiaries.
