The McClatchy Co.'s offer of discounted buybacks to bondholders has expired, with the exchange reducing public bond debt by $75 million.
When the offer expired Thursday, the Sacramento media company said the exchange netted a 9 percent acceptance rate. The company will exchange $103 million in tendered notes for $3.4 million in cash and $24.2 million in new notes.
McClatchy had hoped to exchange $1.15 billion in debt for $60 million in cash and $175 million in new notes, which would pay 15.75 percent interest.
Elaine Lintecum, McClatchy's treasurer, said Friday that she was nevertheless pleased that the company has reduced bond debt by more than $100 million in the first half of this year. Another $31 million came from the retirement of 2009 maturities.
"We saw the offering as a good opportunity to take advantage of bond discounts to reduce our debt … McClatchy has no other debt maturities until 2011; we do not expect to make a required pension contribution until 2010, and we have suspended cash dividends.
"So our cash is expected to be used primarily for debt repayment for the remainder of 2009."
McClatchy, saddled with about $2 billion in debt left from its 2006 purchase of Knight Ridder Inc. and dealing with economic woes in its major media markets, last month offered to buy back a portion of its $1.15 billion in bond debt for 18 cents to 33 cents on the dollar.
Bondholders displeased with the buyback offer noted that Standard & Poor's rated the new notes at CCC-, a level far below investment grade.
Analysts have warned, however, that bondholders who declined McClatchy's offer run the risk of not getting paid if the firm files for bankruptcy protection, which the company says it will not do.
Shares for McClatchy, publisher of The Sacramento Bee and 29 other daily newspapers, were down 22 cents, or 32.3 percent, to close at 46 cents a share Friday on the New York Stock Exchange.
Call The Bee's Mark Glover, (916) 321-1184.
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