The McClatchy Co., seeking to reduce debt, said this week it has negotiated a private agreement to buy back some of its bonds for $459.5 million.
Sacramento-based McClatchy, which owns The Bee and 28 other newspapers, said it negotiated the deals with Chatham Asset Management and Omega Charitable Partners, an investment entity controlled by billionaire hedge fund manager Leon G. Cooperman. The agreement was disclosed in a Securities and Exchange Commission filing on Wednesday.
The deal comes nearly a month after McClatchy made a public offer to buy back up to $406 million worth of bonds that mature in 2022. While that offer is still on the table, and doesn’t expire until next Wednesday, McClatchy cut a private deal to buy back $259.35 million worth of the 2022 bonds and $150 million worth of bonds coming due in 2017. While the principal amount of the bonds total $409.35 million, McClatchy has agreed to pay $459.5 million.
If other owners of the 2022 bonds agree to sell back more than $95.5 million worth of notes, then the deal with Chatham and Omega will be pared back accordingly.
McClatchy has been eager to reduce its debt, currenly totalling $1.5 billion. The company has been paying 9 percent interest on the 2022 notes and 5.75 percent on the 2017 notes. The bond buyback is being financed in large part by the $406 million in after-tax proceeds the company received from the recent sale of its share of automotive website Cars.com.
McClatchy’s chief financial officer, Elaine Lintecum, said the company wouldn’t comment beyond the SEC filing.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.