Saturday, June 07, 2008

Local Media Problems

All not well in Philly.

Initial reports have stated that Philadelphia Media Holdings "did not maintain the necessary senior debt-to-cash flow ratio -- which can happen when cash flow shrinks -- required by its senior lenders, according to Standard and Poor's Leveraged Commentary and Data unit," AP reported. "As a result, senior lenders blocked the company's interest payments to $85 million in junior loans held by another group of lenders. That's because senior lenders, who hold at least $295 million in loans, want to preserve the company's cash for repayment of its own loans."

When asked who might have leaked the information, Devine said, "We don’t have any idea, we are disappointed that it was leaked."

Brian Tierney, PMH chief executive, and Mark Frisby, executive vice president, did not return calls seeking comment Friday.

The Inquirer and Daily News Web site offered only a short report on the missed payment, stating: "Philadelphia Media Holdings LLC, which publishes the Inquirer, Daily News and, is negotiating changes in loan terms with Citizens Bank and other lenders, Standard & Poor's Leveraged Commentary & Data debt news service told clients, citing unnamed industry sources. The company has been in technical default on a bank loan covenant; senior lenders on June 1 blocked payment to investors who hold the company's mezzanine debt, S&P said."

Hopefully it's just a coincidence that the Inquirer/Daily News sites are down.