CHATHAM ASSET MANAGEMENT SENDS LETTER TO SINCLAIR REGARDING REFINANCING EFFORTS

Rhea-AI Summary

Chatham Asset Management, a significant creditor of Sinclair (NASDAQ: SBGI), addressed a letter to Sinclair's CEO, Christopher Ripley, and the Board of Directors concerning the company's debt maturities. Chatham, holding over $500 million in Sinclair’s debt, supports a traditional refinancing approach, such as a public or private exchange of existing debt into new junior lien bonds, instead of complex methods that could divide the company's collateral. Chatham believes this approach would lower leverage and preserve collateral, benefiting stakeholders and bolstering market confidence. They caution that complex refinancing could stress the company’s debt and equity further. Chatham remains committed to aiding Sinclair in managing its upcoming debt maturities efficiently.

Positive

• Chatham supports a traditional refinancing approach.
• Public or private exchange could lower leverage.
• Refinancing would preserve collateral for first lien lenders.
• Plan could strengthen market confidence in Sinclair.
• Chatham holds significant debt, showcasing vested interest in successful refinancing.

Negative

• Sinclair faces near-term debt maturities, particularly Term B-2 Loans maturing in 2026.
• Complex refinancing methods could alienate existing creditors.
• Potential stress on existing debt and equity if complex refinancing is pursued.
• Current financial constraints imply urgent need for effective refinancing.

CHATHAM, N.J., June 3, 2024 /PRNewswire/ -- Chatham Asset Management, LLC ("Chatham"), a private investment firm that through certain of its affiliates is one of the largest creditors of Sinclair, Inc. ("Sinclair" or the "Company") (NASDAQ: SBGI), today sent a letter to Sinclair's President and Chief Executive Officer, Christopher S. Ripley, and Board of Directors regarding efforts by the Company to address its near-term debt maturities.

The full text of the letter follows:

June 3, 2024

Sinclair, Inc.
Attn: Mr. Chris Ripley, Chief Executive Officer
10706 Beaver Dam Road
Hunt Valley, MD 21030

Dear Mr. Ripley,

Chatham Asset Management, LLC and certain funds it manages ("Chatham") is one of Sinclair, Inc.'s ("Sinclair" or the "Company") largest creditors, owning in excess of $500 million of the 4.125% Senior Secured Notes due 2030 and 5.500% Senior Notes due 2030. We are writing to follow up on our recent dialogue about the Company's capital structure.

Chatham understands that management's focus with respect to Sinclair's balance sheet has turned to its near-term maturities, particularly the Term B-2 Loans[1] maturing in 2026. We are very supportive of a more traditional refinancing effort, like an exchange, as opposed to more complicated machinations that purport to divide the Company's collateral supporting its existing debt.

Specifically, Chatham would support a public or private exchange of Sinclair's existing debt securities into a new junior lien bond to facilitate the refinancing process. We believe term loan lenders would be supportive of such a transaction, as it would lower leverage through the first lien debt and preserve the collateral available to first lien lenders.

We think this is the best option for Sinclair and its stakeholders and would strengthen the market's confidence in the Company. To the contrary, a more complicated refinancing effort that divides pledged collateral would alienate existing creditors and lead to further stress on the Company's existing debt and equity.

Chatham remains committed to a constructive relationship with Sinclair and its management. We look forward to helping the Company address its upcoming maturities in an efficient way that right-sizes the balance sheet, creates operational runway, and loosens financial constraints.

Sincerely,

/s/ Anthony Melchiorre

Anthony Melchiorre
Managing Member
Chatham Asset Management

¹ Term B-2 Loans under the Seventh Amended and Restated Credit Agreement among Sinclair Television Group, Inc. (as Borrower), dated as of April 21, 2022.

View original content:https://www.prnewswire.com/news-releases/chatham-asset-management-sends-letter-to-sinclair-regarding-refinancing-efforts-302161435.html

SOURCE Chatham Asset Management, LLC

FAQ

What is the significance of the Chatham letter to Sinclair?

Chatham Asset Management supports a traditional refinancing approach for Sinclair's debt, aiming to lower leverage and preserve collateral.

Why is Chatham against complex refinancing for Sinclair (NASDAQ: SBGI)?

Chatham believes complex refinancing could divide the company's collateral, alienate creditors, and stress Sinclair's debt and equity further.

What debt does Chatham hold in Sinclair (NASDAQ: SBGI)?

Chatham holds over $500 million of Sinclair’s 4.125% Senior Secured Notes and 5.500% Senior Notes due 2030.

What is Chatham's proposed solution for Sinclair's debt refinancing?

Chatham supports a public or private exchange of Sinclair's existing debt into new junior lien bonds.

What are the potential benefits of Chatham's refinancing plan for Sinclair (NASDAQ: SBGI)?

The plan could lower leverage, preserve collateral, strengthen market confidence, and address near-term maturities efficiently.

What risks does Sinclair face if a complex refinancing plan is adopted?

A complex refinancing plan could alienate creditors and increase stress on Sinclair's existing debt and equity.