LBI Media, Inc. Announces Exchange Offers And Solicitation Of Consents

BURBANK, Calif., Nov. 20, 2014 /PRNewswire/ -- LBI Media, Inc. ("Media") announced today that it is commencing the following exchange offers and consent solicitations:

(a) An offer to exchange (the "Second Priority Secured Subordinated Notes Exchange Offer") Media's 11½%/13½% PIK Toggle Second Priority Secured Subordinated Notes due 2020, Series II (the "New Notes") and the related subsidiary guarantees for any and all outstanding Media's 11½%/13½% PIK Toggle Second Priority Secured Subordinated Notes due 2020 (the "Second Priority Secured Subordinated Notes") pursuant to the Offer to Exchange and Consent Solicitation Statement ("Second Priority Secured Subordinated Notes Offer to Exchange") that was prepared in connection with the Second Priority Secured Subordinated Notes Exchange Offer;

(b) An offer to exchange (the "Senior Subordinated Notes Exchange Offer" and together with the Second Priority Secured Subordinated Notes Exchange Offer, the "Exchange Offers") any combination of (i) New Notes and the related subsidiary guarantees and/or (ii) cash for any and all outstanding Media's 8½% Senior Subordinated Notes due 2017 (the "Senior Subordinated Notes") pursuant to the Offer to Exchange and Consent Solicitation Statement ("Senior Subordinated Notes Offer to Exchange") that was prepared in connection with the Senior Subordinated Notes Exchange Offer; and

(c) A solicitation of consents (the "First Priority Senior Secured Notes Consent Solicitation") from holders of Media's 10% Senior Secured Notes due 2019 (the "First Priority Senior Secured Notes") to proposed amendments to the indenture governing the First Priority Senior Secured Notes (the "First Priority Senior Secured Notes Consent Solicitation") to, among other things, permit the Exchange Offers and related transactions pursuant to the First Priority Senior Secured Notes Consent Solicitation Statement (the "First Priority Secured Notes Consent Solicitation Statement" and together with the Second Priority Secured Subordinated Notes Offer to Exchange and the Senior Subordinated Notes Offer to Exchange, the "Refinancing Documents").

In connection with the Exchange Offers, Media has also agreed to issue, subject to consummation of the Exchange Offers and other conditions, up to $20.0 million in aggregate principal amount of New Notes in a private placement (the "New Notes Placement").

New Notes
The New Notes will be guaranteed on a second priority secured basis by all of Media's existing and future wholly owned domestic subsidiaries (other than the assets of Media's wholly owned subsidiary, Empire Burbank Studios LLC). Interest on the New Notes will accrue from the issue date of the New Notes (x) on or prior to November 15, 2016, at the election of Media, at a rate of (i) 8.75% per annum in cash ("Cash Interest"), plus 2.75% per annum paid-in-kind interest ("PIK Interest") or (ii) 4.25% Cash Interest plus 9.25% PIK Interest and (y) from and after November 15, 2016, at a rate of 8.75% Cash Interest plus 2.75% PIK Interest, in each case, calculated based on the outstanding principal amount of the New Notes as of the beginning of the interest period (after giving effect to any issuance of PIK Notes in respect of the immediately preceding interest period). For each interest period on or prior to November 15, 2016, in the absence of notice sent by Media electing to pay interest on the New Note at a rate of 8.75% Cash Interest and 2.75% PIK Interest prior to the beginning of such interest period, interest on the New Note will be payable in the manner described in clause (x)(ii) of the preceding sentence. The New Notes will mature on April 15, 2020.

Second Priority Secured Subordinated Notes Exchange Offer and Consent Solicitation
In connection with the Second Priority Secured Subordinated Notes Exchange Offer, Media is soliciting (the "Second Priority Secured Subordinated Notes Consent Solicitation" and together with the Second Priority Secured Subordinated Notes Exchange Offer, the "Second Priority Secured Subordinated Notes Exchange Offer and Consent Solicitation") the consent (the "Second Priority Secured Subordinated Notes Consent") of the holders of a majority of the aggregate principal amount of Media's outstanding Second Priority Secured Subordinated Notes to amend the indentures governing the Second Priority Secured Subordinated Notes to eliminate or waive substantially all of the restrictive covenants, eliminate certain events of default, modify covenants regarding mergers and consolidations, and modify or eliminate certain other provisions (the "Second Priority Secured Subordinated Notes Proposed Amendments") pursuant to which each consenting holder will receive a consent fee (the "Consent Payment") of $10 of New Notes for each $1,000 principal amount of Second Priority Secured Subordinated Notes validly tendered and not validly withdrawn. Holders who tender their Second Priority Secured Subordinated Notes pursuant to the Second Priority Secured Subordinated Notes Exchange Offer are obligated to, and are deemed to, consent to the Second Priority Secured Subordinated Notes Proposed Amendments with respect to the entire principal amount of the Second Priority Secured Subordinated Notes tendered by such holders.

Holders of Second Priority Secured Subordinated Notes who validly tender (and do not validly withdraw) their Second Priority Secured Subordinated Notes on or prior to 5:00 p.m., New York City time, on December 4, 2014, unless extended by Media (the "Consent Expiration Time"), and whose Second Priority Secured Subordinated Notes are accepted by Media in the Second Priority Secured Subordinated Notes Exchange Offer, will receive the consideration set forth in the table below, which includes a Consent Payment, under the column "Total Consideration." Holders who validly tender (and do not validly withdraw) their Second Priority Secured Subordinated Notes after the Consent Expiration Time but on or prior to midnight, New York City time, on December 18, 2014 unless such date is extended by Media (such time and date, as the same may be extended, the "Expiration Date"), and whose Second Priority Secured Subordinated Notes are accepted by Media in the Second Priority Secured Subordinated Notes Exchange Offer, will receive the consideration set forth in the table below under the column "Exchange Consideration," but will not be eligible to receive the Consent Payment included in the Total Consideration, under the column "Total Consideration."

The Second Priority Secured Subordinated Notes Exchange Offer and Consent Solicitation will expire at the Expiration Date, unless extended. Tenders of Second Priority Secured Subordinated Notes may be withdrawn and Second Priority Secured Subordinated Notes Consents may be revoked on or prior to 5:00 p.m., New York City time, on December 4, 2014, but not thereafter, unless such deadline is extended by Media (such time and date, as the same may be extended, the "Withdrawal Deadline").

Media has entered into a Support Agreement (the "Second Priority Secured Subordinated Notes Support Agreement") with certain holders who beneficially own approximately $64.0 million aggregate principal amount of the Second Priority Secured Subordinated Notes (approximately 46.0% in aggregate principal amount of the outstanding Second Priority Secured Subordinated Notes not held by Media or Media's affiliates). Each of these holders has agreed to tender its Second Priority Secured Subordinated Notes in the Second Priority Secured Subordinated Notes Exchange Offer and deliver the corresponding Second Priority Secured Subordinated Notes Consents.

Senior Subordinated Notes Exchange Offer and Consent Solicitation
In connection with the Senior Subordinated Notes Exchange Offer, Media is soliciting (the "Senior Subordinated Notes Consent Solicitation" and together with the Senior Subordinated Notes Exchange Offer, the "Senior Subordinated Notes Exchange Offer and Consent Solicitation") the consent (the "Senior Subordinated Notes Consent" and together with the Second Priority Secured Subordinated Notes Consent, the "Consents") of the holders a majority of the aggregate principal amount of Media's outstanding Senior Subordinated Notes to amend the indentures governing the Senior Subordinated Notes to eliminate or waive substantially all of the restrictive covenants, eliminate certain events of default, modify covenants regarding mergers and consolidations, and modify or eliminate certain other provisions (the "Senior Subordinated Notes Proposed Amendments"). Holders who tender their Senior Subordinated Notes pursuant to the Senior Subordinated Notes Exchange Offer are obligated to, and are deemed to consent to the Senior Subordinated Notes Proposed Amendments with respect to the entire principal amount of the Senior Subordinated Notes tendered by such holders.

Holders of Senior Subordinated Notes who validly tender (and do not validly withdraw) their Senior Subordinated Notes on or prior to the Expiration Date, and whose Senior Subordinated Notes are accepted by Media in the Senior Subordinated Notes Exchange Offer, will receive the Exchange Consideration set forth in the table below under the column "Exchange Consideration." No consideration will be paid for a Senior Subordinated Notes Consent.

The Senior Subordinated Notes Exchange Offer and Consent Solicitation will expire at the Expiration Date, unless extended. Tenders of Senior Subordinated Notes may be withdrawn and the corresponding Senior Subordinated Notes Consents may be revoked on or prior to the Withdrawal Deadline, unless such deadline is extended by Media.

Media has entered into a Support Agreement (the "Senior Subordinated Notes Support Agreement" and together with the Second Priority Secured Subordinated Notes Support Agreement, the "Support Agreements") with certain holders who beneficially own approximately $45.8 million aggregate principal amount of the Senior Subordinated Notes (approximately 84.5% in aggregate principal amount of the outstanding Senior Subordinated Notes). Each of these holders has agreed to tender its Senior Subordinated Notes in the Senior Subordinated Notes Exchange Offer and deliver the corresponding Senior Subordinated Notes Consents.

First Priority Senior Secured Notes Consent Solicitation

In connection with the Exchange Offers, Media is soliciting the consent of the holders of a majority of the aggregate principal amount of Media's First Priority Senior Secured Notes, to certain amendments to the indenture governing the First Priority Senior Secured Notes which include, among other things, modifications to permit the Exchange Offers and the New Notes Placement.  Holders of First Priority Senior Secured Notes whose names appeared on the applicable register of noteholders maintained on behalf of the Company at 5:00 p.m., New York City time, on November 19, 2014 that validly consent in the First Priority Senior Secured Notes Solicitation will receive a cash payment equal to $2.50 per $1,000 of principal amount of the First Priority Senior Secured Notes for consents delivered on or prior to the Consent Expiration Time. The First Priority Senior Secured Notes Consent Solicitation will expire at the Expiration Date or such later time and date to which the solicitation is extended.  Consents to the First Priority Senior Secured Notes Consent Solicitation may be revoked on or prior to the Withdrawal Deadline, unless such deadline is extended by Media.

Third Party Consents

Concurrently with the commencement of the Exchange Offers and First Priority Senior Secured Notes Consent Solicitation, Media:

(i) is seeking the consent  of the lenders of a majority of the loans, commitments and letters of credit exposure under the Amended and Restated Credit Agreement, dated as of March 18, 2011 (the "Senior Secured Revolver"), to certain amendments to the Senior Secured Revolver which include, among other things, modifications to permit the Exchange Offers and New Notes Placement; and

(ii) has obtained the consent, subject to certain conditions, from a holder of a majority of the aggregate principal amount of Holdings' 11% Senior Notes due 2017 (the "Holdings Note"), to certain amendments to the indenture governing the Holdings Notes which include, among other things, modifications to permit the Exchange Offers and New Notes Placement (such consents, collectively, the "Third Party Consents").

As a result, the Exchange Offers and First Priority Senior Secured Notes Consent Solicitation are subject to, and conditioned upon, obtaining the Third Party Consents. If the Third Party Consents are not obtained, the Exchange Offers and First Priority Senior Secured Notes Consent Solicitation will not be consummated by Media. The Exchange Offers and First Priority Senior Secured Notes Consent Solicitation are subject to certain other conditions, as more fully described in the Refinancing Documents.  Media has the right to terminate or withdraw any of the Exchange Offers or the First Priority Senior Secured Notes Consent Solicitation at any time and for any reason, including if any of the conditions described in the Refinancing Documents are not satisfied.

The New Notes will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be transferred or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Exchange Offers are being made only to qualified institutional buyers and institutional accredited investors and outside the United States to persons other than U.S. persons. The Exchange Offers are made only by, and pursuant to, the terms set forth in the Refinancing Documents, and the information in this press release is qualified by reference to the Refinancing Documents and if applicable, the accompanying consent and letter of transmittal.

This press release shall not constitute a solicitation of consents, an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. No recommendation is made as to whether holders of the securities should tender their securities or give their consent.

D.F. King & Co., Inc. ("D.F. King") is acting as the Information Agent and Exchange Agent for the Exchange Offers and solicitation of Consents. Requests for the Refinancing Documents, the accompanying consent and letter of transmittal and any supplements thereto may be directed to D.F. King at (212) 269-5550 (for brokers and banks) or (866) 745-0273 (for all others).

Forward Looking Statements

This press release contains "forward-looking statements". These forward-looking statements reflect Media's current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Media undertakes no obligation to update or revise any forward-looking statements to reflect developments or information obtained after the date of this press release, except as required by law.

SOURCE LBI Media, Inc.

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