Magazine article Editor & Publisher

Owner of Philly Papers Blames Leak for Interest Payment Story

Magazine article Editor & Publisher

Owner of Philly Papers Blames Leak for Interest Payment Story

Article excerpt

Owners of the Philadelphia Inquirer and Philadelphia Daily News say someone wrongly leaked information from a private conference call earlier this week that resulted in a Standard & Poor's report on the ownership missing an interest payment.

Jay Devine, a spokesman for Philadelphia Media Holdings, declined to confirm or deny the report that the company missed a June 1 interest payment on $85 million of loans and is in talks with lenders for relief. But he said the report was the result of an improper leak by someone involved in the conference call just days ago.

"The report was the result of someone breaking a confidence of a conference call that was held the other day between the bankers, our company and financial analysts," he told E&P Friday, declining to say what day the call occurred. "We will express our disappointment and try to reiterate the fact that they are confidential discussions and private discussions and ask people to honor that confidence."

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. …

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