Sinclair Announces Supplement to Confidential Offering Memorandum, Offer to Exchange and Consent Solicitation Statement Relating to the Exchange Offer and Consent Solicitation of 4.375% Second-Out First Lien Secured Notes of Sinclair Television Group

Rhea-AI Summary

Sinclair Television Group (SBGI) has announced amendments to its previously announced private exchange offer and consent solicitation through Supplement No. 1. The exchange offer allows eligible holders to swap their existing 4.125% Senior Secured Notes due 2030 for new 4.375% Second-Out First Lien Secured Notes due 2032.

The supplement modifies certain terms of the asset sale covenant and the definition of 'Permitted Liens' applicable to the Exchange Second-Out Notes. The exchange offer is exclusively available to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S. J.P. Morgan Securities serves as the sole Dealer Manager for the transaction.

The completion of the exchange offer and consent solicitation remains subject to certain conditions, including the Transactions Condition. The Exchange Second-Out Notes will not be registered under the Securities Act and can only be offered to eligible holders through a private placement.

Positive

• Offering higher interest rate notes (4.375%) compared to existing notes (4.125%)
• Structured as secured notes, providing additional protection for noteholders

Negative

• Exchange offer to qualified institutional buyers and non-U.S. persons, restricting participation
• New notes will be less liquid due to being unregistered securities

Insights

Financial Analyst

This debt restructuring initiative by Sinclair Television Group represents a significant strategic move in their capital management approach. The supplemental changes to the asset sale covenant and Permitted Liens definition in the exchange offer for the 4.125% Senior Secured Notes due 2030 suggest enhanced flexibility in asset management and potential collateral arrangements.

The exclusive nature of the offer, to qualified institutional buyers and non-U.S. persons under Rule 144A and Regulation S, indicates a sophisticated approach to restructuring approximately $971.4 million in market capitalization. The involvement of J.P. Morgan Securities as the sole Dealer Manager adds credibility to the transaction and suggests favorable terms may be available to participating bondholders.

Of particular interest is the amendment to the asset sale covenant, which could provide Sinclair with greater operational flexibility in managing its asset portfolio - important for media companies navigating the evolving broadcast landscape. The modification of Permitted Liens definitions may also signal preparation for future strategic transactions or refinancing opportunities.

The structured nature of this exchange offer, with its specific eligibility requirements and conditional terms, demonstrates a careful approach to liability management while maintaining compliance with securities regulations. This transaction could potentially optimize Sinclair's debt profile and enhance its financial position in the competitive media market.

BALTIMORE--(BUSINESS WIRE)-- Sinclair, Inc. (Nasdaq: SBGI), the “Company” or “Sinclair”) today announced that Sinclair Television Group, Inc. (“STG” or the “Issuer”) has supplemented and amended the Confidential Offering Memorandum, Offer to Exchange and Consent Solicitation Statement, dated as of January 27, 2025 (the “Offering Memorandum”) with respect to the previously announced (i) private exchange offer (the “Exchange Offer”) to Eligible Holders (as defined below) of 4.375% Second-Out First Lien Secured Notes due 2032 (the “Exchange Second-Out Notes”) for any and all of the Issuer’s outstanding 4.125% Senior Secured Notes due 2030 (the “Existing Notes”) and (ii) the solicitation of consents (the “Consent Solicitation”) from Eligible Holders of the Existing Notes, pursuant to a supplement dated the date hereof (“Supplement No. 1”). Supplement No. 1 amends certain terms of the asset sale covenant and the definition of “Permitted Liens” that apply to the Exchange Second-Out Notes as further set forth in Supplement No. 1.

Except as otherwise described under “Amendments to Description of Exchange Second-Out Notes” in Supplement No. 1, the terms and conditions of the Exchange Offer and the Consent Solicitation set forth in the Offering Memorandum remain unchanged. Capitalized terms not defined herein shall have the respective meanings ascribed to them in the Offering Memorandum.

Important Information

The Exchange Offer and Consent Solicitation, including the Issuer’s acceptance of validly tendered Existing Notes and payment of the applicable consideration, is conditioned on the satisfaction or waiver of certain conditions precedent, including, but not limited to, the Transactions Condition, as further described in the Offering Memorandum. The Issuer may terminate, withdraw, amend or extend the Exchange Offer and/or Consent Solicitation in its sole discretion, subject to certain exceptions.

The Exchange Offer is being made, and the Exchange Second-Out Notes are being offered and issued, only to holders of Existing Notes who are reasonably believed to be (i) “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) not U.S. persons (as defined in Regulation S under the Securities Act) or purchasing for the account or benefit of U.S. persons, other than a distributor, and are purchasing the Exchange Second-Out Notes in an offshore transaction in accordance with Regulation S. The holders of Existing Notes who are eligible to participate in the Exchange Offer pursuant to the foregoing conditions are referred to as “Eligible Holders.” Only Eligible Holders are authorized to receive or review the Offering Memorandum or to participate in the Exchange Offer and Consent Solicitation.

J.P. Morgan Securities LLC is acting as sole Dealer Manager for the Exchange Offer and Consent Solicitation.

The Offering Memorandum will be distributed only to holders of Existing Notes that complete and return a letter of eligibility confirming that they are Eligible Holders. Copies of the eligibility letter are available to holders through the information and exchange agent for the Exchange Offer and Consent Solicitation, Ipreo LLC, at (888) 593-9546 (U.S. toll-free) or (212) 849-3880 (Banks and Brokers) or ipreo-exchangeoffer@ihsmarkit.com.

The Exchange Offer and Consent Solicitation is made only by, and pursuant to the terms of, the Offering Memorandum, and the information in this news release is qualified by reference thereto.

This press release shall not constitute an offer to sell or the solicitation of an offer to exchange or purchase the Exchange Second-Out Notes, nor shall there be any offer or exchange of the Exchange Second-Out Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful. In addition, this press release is neither an offer to exchange or purchase nor a solicitation of an offer to sell any Existing Notes in the Exchange Offer or a solicitation of consents to the Proposed Amendments, and this press release does not constitute a notice of redemption with respect to any securities.

The Exchange Second-Out Notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Accordingly, the Exchange Second-Out Notes are being offered for exchange only to persons reasonably believed to be (i) “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) or (ii) not U.S. persons (as defined in Regulation S under the Securities Act) or purchasing for the account or benefit of U.S. persons, other than a distributor, and are purchasing the Exchange Second-Out Notes in an offshore transaction in accordance with Regulation S.

Forward-Looking Statements:

The matters discussed in this news release, particularly those in the section labeled “Outlook,” include forward-looking statements regarding, among other things, the other Transactions. When used in this news release, the words “outlook,” “intends to,” “believes,” “anticipates,” “expects,” “achieves,” “estimates,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including and in addition to the assumptions set forth therein, but not limited to, the occurrence of any event, change or other circumstance that could give rise to the termination of the other Transactions or the Exchange Offer and/or Consent Solicitation, the ability to negotiate and reach agreement on definitive documentation relating to the other Transactions or the Exchange Offer and/or Consent Solicitation, the ability to satisfy closing conditions to the completion of the other Transactions or the Exchange Offer and/or Consent Solicitation; the Company’s ability to achieve the anticipated benefits from the other Transactions and the Exchange Offer and/or Consent Solicitation; other risks related to the completion of the other Transactions, the Exchange Offer or the Consent Solicitation and actions related thereto, the Company’s ability the rate of decline in the number of subscribers to services provided by traditional and virtual multi-channel video programming distributors; the Company’s ability to generate cash to service its substantial indebtedness; the successful execution of outsourcing agreements; the successful execution of retransmission consent agreements; the successful execution of network and Distributor affiliation agreements; the Company’s ability to identify and consummate acquisitions and investments, to manage increased financial leverage resulting from acquisitions and investments, and to achieve anticipated returns on those investments once consummated; the Company’s ability to compete for viewers and advertisers; pricing and demand fluctuations in local and national advertising; the appeal of the Company’s programming and volatility in programming costs; material legal, financial and reputational risks and operational disruptions resulting from a breach of the Company’s information systems; the impact of FCC and other regulatory proceedings against the Company; compliance with laws and uncertainties associated with potential changes in the regulatory environment affecting the Company’s business and growth strategy; the impact of pending and future litigation claims against the Company; the Company’s limited experience in operating or investing in non-broadcast related businesses; and any risk factors set forth in the Company’s recent reports on Form 10-Q and/or Form 10-K, as filed with the Securities and Exchange Commission. There can be no assurances that the assumptions and other factors referred to in this release will occur. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.

Category: Financial

View source version on businesswire.com: https://www.businesswire.com/news/home/20250130707511/en/

Investor Contacts:

Chris King, VP, Investor Relations

Billie-Jo McIntire, VP, Corporate Finance

(410) 568-1500

Source: Sinclair, Inc.

FAQ

What are the key terms of Sinclair's (SBGI) new exchange offer for its 2030 notes?

Sinclair is offering to exchange 4.125% Senior Secured Notes due 2030 for new 4.375% Second-Out First Lien Secured Notes due 2032, with amended terms regarding asset sale covenant and Permitted Liens.

Who is eligible to participate in SBGI's 2024 notes exchange offer?

Only qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S are eligible to participate in the exchange offer.

What is the interest rate difference between SBGI's existing and new exchange notes?

The new Exchange Second-Out Notes offer a 4.375% interest rate, compared to the 4.125% rate on the existing notes, representing a 0.25% increase.

Will SBGI's new Exchange Second-Out Notes be registered under the Securities Act?

No, the Exchange Second-Out Notes will not be registered under the Securities Act and can only be offered through private placement to eligible holders.