The broadcast media company that among its holdings includes Bally-branded regional sports networks has just purchased and assumed the rights and obligations under an accounts receivable securitization facility of Diamond Sports Finance SPV.
Diamond SPV is an indirect subsidiary of Diamond Sports Group LLC, an entity created by Sinclair Broadcast Group.
With the move, Sinclair is now in possession of the lenders’ outstanding loans and commitments under the A/R Facility.
How it accomplished it involves a big payment, which Sinclair disclosed on Monday (11/8) is valued at approximately $184.4 million.
This, Sinclair says, represents 101% of the aggregate outstanding principal amount of the loans under the A/R Facility, in addition to any accrued interest and outstanding fees and expenses.
With the payment, Sinclair and Diamond SPV entered into an “omnibus amendment to the A/R Facility,” which the company says provides greater flexibility to DSG.
Indeed, this flexibility includes raising the maximum facility limit availability to up to $400 million, from up to $250 million; eliminating the early amortization event related to DSG’s EBITDA less interest expense covenant; extending the stated maturity date by one year, to September 23, 2024; and relaxing certain concentration limits, thereby increasing the amounts of certain accounts receivable eligible to be sold.
The other material terms of the A/R Facility remain unchanged, Sinclair said.
In prepared comments, Sinclair CEO Chris Ripley explained, “We believe our decision to have the company assume the lender obligations under the A/R Facility demonstrates our sensible long-term support of DSG. The amendment will provide DSG with additional flexibility to manage its liquidity. At the same time, we believe the structure of the facility results in a low risk, high quality investment for the company.”
Sinclair shareholders were less enthusiastic. At 12:05pm ET, SBGI was down 2.37% to $26.75; SBGI is set to go ex-dividend on November 30.
