mni4amend8-kcover.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): September 26, 2008
(Exact
name of registrant as specified in its charter)
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DELAWARE
(State
or other jurisdiction of
incorporation
or organization)
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1-9824
(Commission
File
Number)
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52-2080478
(I.R.S.
Employer
Identification
No.)
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2100
Q Street
Sacramento,
CA 95816
(Address
of principal executive offices, zip code)
Registrant’s
telephone number, including area code (916) 321-1846
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01
Entries Into a Material Definitive Agreement
On
September 26, 2008, The McClatchy Company, a Delaware corporation (“McClatchy”
or the “Company”) entered into an amendment with its lenders under its Credit
Agreement dated June 27, 2006, and amended on March 28, 2007, July 19, 2007, and
March 28, 2008 (the “Credit Agreement”) by and among McClatchy and Bank of
America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer,
JPMorgan Chase Bank, N.A., as Syndication Agent, and other lenders thereto (the
“Amendment”).
Pursuant
to the Amendment, the consolidated total leverage ratio covenant in the Credit
Agreement was increased to allow indebtedness of a maximum of 6.25 times cash
flow (as defined in the Amendment) through the Company’s fiscal quarter ending
December 2008; stepping up to 7.00 times cash flow from the fiscal quarter
ending in March 2009 to the fiscal quarter ending in September 2010; and
declining to 6.25 times cash flow as of the end of each fiscal quarter
thereafter. Upon the sale by the Company of certain real estate in Miami, the
leverage ratio applicable as of the end of each fiscal quarter thereafter will
be reduced by 0.25 times cash flow. In addition, the consolidated
interest coverage ratio covenant under the Credit Agreement was decreased to a
minimum of 2.25 times cash flow through the fiscal quarter ending in December
2008; and further declining to 2.00 times cash flow as of the end of each fiscal
quarter thereafter. Under the Amendment, there is an immediate
reduction in the revolving credit commitment now totaling $625 million to $600
million (to a total facility of $1.150 billion including term loans); a further
reduction of $125 million upon sale of the Miami real estate; and a reduction of
$25 million on December 31, 2009. The final maturity of the revolving
credit commitment and the term loan remains June 27, 2011. The
Amendment further adds additional direct and indirect material subsidiaries as
guarantors.
As a
condition to the Amendment, McClatchy and its direct and indirect material
subsidiaries granted to the lenders a security interest in certain intangible
assets, inventory, accounts receivable and certain other assets. The
pricing on all outstanding loans was increased to include interest at the London
Interbank Offered Rate (LIBOR) plus a spread ranging from 200 basis points to
425 basis points, based upon the consolidated total leverage ratio. Loans
bearing interest with reference to the prime rate (Base Rate) will have a spread
over the Base Rate ranging from 100 basis points to 325 basis points, based on
the consolidated total leverage ratio. Upon completion of the Miami
real estate sale, the applicable interest rate tiers will decrease by 25 basis
points. The Amendment further modifies the requirements for mandatory
prepayments of loans under the Credit Agreement providing for additional
prepayments upon certain asset sales and certain issuances of equity and
debt.
Under the
Amendment, McClatchy’s ability to pay cash dividends will be further
limited. McClatchy is permitted to pay dividends up to $8 million in
each fiscal quarter through the quarter ending in June
2009. Beginning with the fiscal quarter ending in September 2009,
dividends are not permitted if leverage is greater than or equal to 5.0 times
cash flow. Dividends are permitted up to $8 million during each
fiscal quarter when leverage is less than 5.0 times cash flow and greater than
or equal to 4.0 times cash flow. Dividends are permitted up to $16
million during each fiscal quarter when leverage is less than 4.0 times cash
flow.
The
Amendment adds and amends other covenants including limitations on additional
debt, investments and acquisitions, dispositions and the ability to retire the
Company’s bonds that come due in 2011 and thereafter prior to
maturity.
Except as
provided in the Amendment and prior amendments, all provisions of the Credit
Agreement remain in full force and effect. The foregoing description
of the Amendment does not purport to be complete and is qualified in its
entirety by reference to the Amendment, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K.
Item
9.01. Financial Statements and Exhibits
c) Exhibits
Exhibit
10.1 Amendment No. 4 to Credit Agreement dated as of
September 26, 2008 by and among The McClatchy Company, the lenders under its
Credit Agreement dated June 27, 2006, and amended on March 28, 2007, July 19,
2007, and March 28, 2008 (the “Credit Agreement”) by and among The McClatchy
Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender and
L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent, and other lenders
thereto and Bank of America, N.A., as Administrative Agent.
Exhibit
10.2 Security Agreement dated as of September 26, 2008
executed by The McClatchy Company and certain of its subsidiaries in favor of
Bank of America, N.A., as Administrative Agent.
Exhibit
10.3 Amended and Restated Guaranty dated as of September
26, 2008 executed by certain subsidiaries of The McClatchy Company in favor of
the lenders under the Credit Agreement.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
September
30,
2008
The McClatchy Company
/s/
Patrick J. Talamantes
Patrick
J. Talamantes
Vice
President and Chief Financial Officer
INDEX
TO EXHIBITS
Exhibit
Number Description
10.1
Amendment No. 4 to Credit Agreement dated as of September 26, 2008 by
and
between The McClatchy Company as Bank
of America, N.A., as Administrative Agent
10.2
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Security
Agreement dated as of September 26, 2008 executed by The McClatchy Company
and certain of its subsidiaries in favor of Bank of America, N.A., as
Administrative Agent.
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10.3
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Amended
and Restated Guaranty dated as of September 26, 2008 executed by certain
subsidiaries of The McClatchy Company in favor of the lenders under the
Credit Agreement.
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