Debt backing Sinclair is up in secondary trading today after Chatham Asset Management sent a public letter to CEO Christopher Ripley and the company’s Board of Directors, calling for “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.”
Chatham, which owns in excess of $500mn of Sinclair’s 4.125% first-lien notes due 2030 and 5.5% senior notes due 2030, supports a “public or private exchange of Sinclair’s existing debt securities into a new junior lien bond to facilitate the refinancing process,” according to a statement.
The 4.125% first-lien notes due 2030 changed hands at either side of 71 this morning, up from trades of 68 last week, trade data showed, while its 5.5% senior notes due 2030 changed hands at 68 today, up from 65.5 going out last week. The issuer’s B-2 term loan maturing in 2026 jumped to a 95-97 market, up from 93.5-95.5, while its B-3 tranche due 2028 is now quoted at 72.5-75.5, up from 71-74, and the B-4 series due 2029 is at 68.6-71.5, up from 67-70 last week, according to sources.
The issuer’s first-lien debt is rated B2/BB-, while its senior notes are rated Caa1/B-.
In the statement, Chatham Asset Management also said that it believes “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.” The statement also warned that “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.”
The creditor in the 2030 bonds stated in the letter that they understood management’s focus has been shifted toward front-end maturities, particularly the term loan B-2 due 2026. LFI reported earlier this month that a collective of Sinclair lenders that signed a cooperation agreement earlier this year has now reached a majority position. The group is working with Milbank as legal advisor and has also been consulting with Perella Weinberg as financial advisor, as reported.
Peter Agra
peter.agra@levfininsights.com
Mobile: +1 862 218 9861
