Sinclair raising $1.1B in debt deals to fund acquisition

A unit of Sinclair Broadcast Group Inc., the largest owner of TV stations in the U.S., is raising $1.05 billion in the junk-bond and loan markets to finance its acquisition of television stations owned by the Allbritton family.

The company sold $550 million of 5.625 percent notes due in 2024 in an offering that was increased from an initial plan of $450 million, according to data compiled by Bloomberg. Sinclair also plans to raise $500 million of new term loans maturing in July 2021, according to a statement today.

Both pieces of debt will be used to buy the stock of Perpetual Corp. and the equity interest of Charleston Television LLC, which are both owned by the Allbritton family, Hunt Valley, Maryland-based Sinclair said in a separate statement. That transaction was valued at $985 million at the time of the July 2013 announcement.

The company, which has $3.3 billion of debt, initially planned to fund the buyout with $1.2 billion of term loans, it said in September. Sinclair also intends to amend terms under its bank credit agreement and seek to convert term loan commitments into revolving debt.

Standard & Poor’s raised the rating on Sinclair’s senior unsecured debt today to B+ from B as a result of the change, the ratings company said in a statement.

S&P also ranked the proposed bonds B+, four levels below investment grade. Moody’s Investors Service rated the bonds an equivalent B1.

The notes sold today pay 3.04 percentage points more than similar-maturity Treasuries, Bloomberg data show. In December, the company sold $350 million of 6.375 percent notes due 2021 that yielded 404 basis points more than government debt.

Sinclair said in March it would restructure the Allbritton deal to meet objections from the Federal Communications Commission, selling a station in three markets where it proposes to buy an affiliate of Walt Disney Co.’s ABC network from Allbritton.

The broadcaster will own and operate 162 television stations in 78 markets once it completes the Allbritton and other pending transactions.

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