Earlier today TV station company Young Broadcasting filed for bankruptcy in the Southern district of New York, raising the ytd default rate to 5.19% by notional outstanding, and 4.37% by number of issuers. The company owed $370 million of secured debt and $640 bonds at the time of filing. The bankruptcy was not a big surprise as last month the company decided to skip a $6 million interest payment on its 8.75% notes due 2014, and subsequently missed another $4.5 million interest payment due on its secured credit facility.The company's attempts to negotiate an out of court deal with bondholders failed, after the bondholder group, consisting of CapRe, Highland, Par Four and AIG (aka taxpayers) could not agree on a consensual plan.
The immediate reason for the bankruptcy was Moelis and Co.'s failure to find a buyer for Young's largest TV station, San-Francisco based KRON-TV, thereby preventing the company from getting much needed last minute liquidity.
Young has hired Sonnenschein as legal counsel and UBS as financial advisor.
Bondholders will soon be equity owners of 11 TV stations across the US, among them most prominent KRON 4 in SF, News 10 in Albany, WBAY TV in Green Bay, KLFY 10 in Lafayette, WLNS 6 in Lansing and KWQC in Davenport.
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