Friday, February 5, 2010

Notable financing, of the "publishing" sort. McClatchy's cost of capital almost 12% (MNI)

Newspaper publisher McClatchy (MNI) shares are off 9% today, after they announced the expensive cost to refinance June2011 debt.

The new issue of 2017 11.5% Senior Secured notes priced at 98.824cents on the dollar, to yield somewhere around 11.8%, a touch above it's other 2017 notes that are trading to yield 11.05%, at least as of a couple days ago.  They haven't traded today, so might be yielding more.

Good luck to them.  They have been making operational improvements, but hey - with a broken business model and a big debt load, the cost of survival will continue to be very high.

The stock has rocketed off the early 2009 lows.  It you were an absolute maestro and picked the March low of 41cents, you'd have made over 1015% in the shares -----   but you'd still trail the folks that paid 8cents on the dollar for the debt that McClathcy is about to buy back for 101cents on the dollar.  Hats off!

Copyright 2010 AlphaNinja

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