Thursday, January 22, 2009

Univision Settles Lawsuit with Mexicans; Bonds Spike

After a long and costly battle between highly leveraged Hispanic TV company Univision, which was LBOed in late 2006 by a consortium of billionaire Haim Saban, Madison Dearborn, Providence, Tommy Lee and TGP, for $13.7, and has a bout $10 billion of mostly covenant lite debt, and Mexican soap opera maker Televisa, the two have finally decided to settle this afternoon.

As a result the company bonds and loans all were up: the 1st lien cov-lite TL was up 5 points to 52, the 7.85% bonds due 2011 were well bid in the low 60s, while the 9.75% Toggle notes due 2015 were up 2 to 21.

Curious if the $3.7 billion of equity "value" is still marked on the books of any of its sponsors. Anyway, as the company has a debt/EBITDA of 14x, the answer probably doesn't matter. March 15th is the next interest payment date on the PIK notes, which will likely be paid in kind (i.e.more debt) so a critical date for bondholders will likely be July 15 when the 7.875% have an coupon due. Most credit fund managers by then will likely be on permanent vacation, which explains the daytrading enthusiasm to bid up the bonds today.
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