Sinclair debt deal bolsters balance sheet amid merger frenzy

Television giant and media company Sinclair Inc. on Tuesday unveiled a deal with some creditors to boost its liquidity and thereby strengthen its long-term balance sheet.

Sinclair Television Group and certain affiliated entities have entered into a “Transaction Support Agreement” with certain secured creditors, “the principal terms of which are a new capital financing and a debt recapitalization to strengthen the company's balance sheet and prepare for its long-term growth.” Be prepared.” the company said.

The agreement covers lenders holding approximately 80% of the company's outstanding loans and approximately 75% of secured note holders. It includes the establishment of a $650 million revolving credit facility and various term loan refinancing options.

Sinclair President and CEO Chris Ripley said the arrangements “demonstrate strong creditor support for the company's long-term success through enhanced financial liquidity and flexibility.” “The refinancing is expected to push our closest meaningful maturity to December 2029 and extend all of our maturities to a weighted average of 6.6 years, while materially reducing our first lien net leverage and increasing our Financial selectivity allows us to continue to deleverage as the market evolves over time while delivering higher returns for all of the company's stakeholders.”

Sinclair said the proposed deal must still be finalized and is “subject to the satisfaction or waiver of certain conditions” and lenders' consent.

The company made no specific mention of mergers and acquisitions on Tuesday, although financial flexibility could help it pursue potential mergers or acquisitions. However, the incoming administration of President-elect Donald Trump has made deregulation a priority, and companies that own local stations, including Sinclair, Nexstar, Grey, EW Scripps and Tegna, are seen as likely to gain access in the wider context New trading opportunities. Media expectations of a possible M&A frenzy.

Wells Fargo analyst Steven Cahall predicted in a recent report: “The incoming Trump administration and Trump’s choice of Brendan Kahl to lead the FCC could usher in a break from the airwaves. Regulation and Consolidation. “We believe the new FCC will pursue much-needed broadcast deregulation, which may include the removal of ownership caps.”