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Filed pursuant to Rule 424(b)(3)
Registration Statement Number 333-207833
PROSPECTUS
LIN TELEVISION CORPORATION
(as Issuer)
(as Parent Guarantor)
Exchange
Offer for
$400,000,000 5.875% Senior Notes due 2022
The Exchange Offer:
The Exchange Notes:
You should consider carefully the “Risk Factors” beginning on
page 10 of this prospectus before participating in the exchange
offer.
Neither the Securities and Exchange Commission, nor any state
securities commission, has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense
.
Each broker-dealer that receives exchange notes for its own
account pursuant to the exchange offer must acknowledge that it
shall deliver a prospectus in connection with any resale of such
exchange notes. The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer shall
not be deemed to admit that it is an “underwriter” within the
meaning of the Securities Act. This prospectus, as it may be
amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of exchange notes received
in exchange for original notes where such original notes were
acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Issuer has agreed that,
for a period ending on the earlier of (i) 180 days from the date on
which this registration statement is declared effective, and (ii)
the date on which broker-dealer are no longer required to deliver a
after the expiration date of the exchange offer, we will make this
prospectus available to any broker-dealer for use in connection
with any such resale. See “Plan of Distribution.”
The date of this prospectus November 19, 2015
You should rely only on the information contained in this
document and any document to which we have referred you. See “Where
You Can Find Other Information.” We have not authorized anyone to
provide you with any additional or different information. You
should assume the information appearing in this prospectus and the
documents incorporated by reference herein are accurate only as of
their respective dates. Our business, financial condition and
results of operations, and prospectus may have changed since those
dates.
TABLE OF CONTENTS
Page
ABOUT THIS PROSPECTUS
In this prospectus, unless otherwise specified or the context
otherwise requires, the “Issuer” refers to Media General Financing
Sub, Inc., for all dates prior to consummation of the Escrow Merger
(as defined in the section entitled “Description of the Exchange
Notes”), and LIN Television Corporation, for all dates as of and
following consummation of the Escrow Merger. The Issuer is a
direct, wholly-owned subsidiary of Media General, Inc., which we
refer to in this prospectus as “Media General” or the “Parent.” The
terms “we,” “us,” and “our” refer to Media General and all of its
subsidiaries, unless otherwise indicated or the context otherwise
requires. “Original notes” refers to the $400,000,000 aggregate
principal amount of the Issuer’s 5.875% Senior Notes due 2022.
“Exchange notes” refers to the Issuer’s 5.875% Senior Notes due
2022, offered pursuant to this prospectus. The original notes and
the exchange notes are sometimes referred to collectively as the
“notes.”
Any statements in this prospectus concerning the provisions of
any document are not complete. Such references are made to the copy
of that document filed or incorporated or deemed to be incorporated
by reference as an exhibit to the registration statement of which
this prospectus is a part or otherwise filed with the Securities
and Exchange Commission (the “SEC”). Each statement concerning the
provisions of any document is qualified in its entirety by
reference to the document so filed.
No information in this prospectus constitutes legal, business or
tax advice and you should not consider it as such. You should
consult your own attorney, business advisor and tax advisor for
legal, business and tax advice regarding the exchange offer. You
should read this prospectus together with the information described
below under the headings “Where You Can Find More Information” and
“Incorporation by Reference.” This information is available to you
without charge upon written or oral request.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in
this prospectus contain “forward-looking” statements, as that term
is defined by the federal securities laws. Forward-looking
statements include, among others, statements related to our
liquidity and capital resources, future financial results, pending
transactions and contractual obligations, critical accounting
estimates and assumptions, the impact of technological advances
including consumer acceptance of mobile television and expectations
regarding the effects of retransmission fees, network affiliate
fees, pension and postretirement plans, capital spending, general
advertising levels and political advertising levels, and the
effects of changes to FCC regulations and FCC approval of license
applications. These statements involve known and unknown risks,
uncertainties and other factors, including the factors described
under “Risk Factors” in this prospectus and our Annual Report on
Form 10-K for the year ended December 31, 2014 incorporated into
this prospectus by reference.
Forward-looking statements, including those which use words such
as “believe,” “anticipate,” “expect,” “estimate,” “intend,”
“project,” “plan,” “may” and similar words, including “outlook”,
are made as of the date of this prospectus and are subject to risks
and uncertainties that could potentially cause actual results to
differ materially from those results expressed in or implied by
such statements. You should understand that it is not possible to
foresee or identify all risk factors. Consequently, any such list
should not be considered a complete statement of all potential
risks or uncertainties.
Various important factors could cause actual results to differ
materially from our forward looking statements, estimates or
projections including, without limitation:
You should not place undue reliance on our forward-looking
statements. Although forward-looking statements reflect our good
faith beliefs at the time made, reliance should not be placed on
forward-looking statements because they involve known and unknown
risks, uncertainties and other factors, which may cause our actual
results, performance or achievements to differ materially from
anticipated future results, performance or achievements expressed
or implied by such forward-looking statements. We undertake no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
changed circumstances or otherwise.
This list of factors is illustrative, but by no means
exhaustive. Accordingly, all forward-looking statements should be
evaluated with the understanding of their inherent uncertainty. You
are advised to consult any further disclosures we make on related
subjects in the reports we file with the SEC pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”).
RISK FACTORS
An investment in the exchange notes involves a significant
degree of risk. You should carefully consider the following risk
factors, together with all of the other information included or
incorporated by reference in this prospectus, before you decide
whether to participate in the exchange offer. The risks and
uncertainties described below and in such incorporated documents
are not the only risks and uncertainties that we face. Additional
risks and uncertainties not currently known to us or that we
currently deem immaterial also may impair our financial condition
and business operations. If any of the following risks actually
occurs, our business’s financial condition and operating results
would suffer. The risks discussed below also include
forward-looking statements and our actual results may differ
substantially from those discussed in those forward-looking
statements. See “Cautionary
Note
Regarding Forward-Looking Information.”
Risks Related to the Exchange Offer
You must comply with the exchange offer procedures in order to
receive new, freely tradable exchange notes.
The Issuer will not accept your original notes for exchange if
you do not follow the exchange offer procedures. The Issuer will
issue exchange notes as part of this exchange offer only after
timely receipt of your original notes, a properly completed and
duly executed letter of transmittal and all other required
documents or if you comply with the guaranteed delivery procedures
for tendering your original notes. Therefore, if you want to tender
your original notes, please allow sufficient time to ensure timely
delivery. If the Issuer does not receive your original notes,
letter of transmittal, and all other required documents by the
expiration date of the exchange offer, or you do not otherwise
comply with the guaranteed delivery procedures for tendering your
original notes, the Issuer will not accept your original notes for
exchange. Neither the Issuer nor the exchange agent is required to
notify you of defects or irregularities with respect to the tenders
of original notes for exchange. If there are defects or
irregularities with respect to your tender of original notes, the
Issuer will not accept your original notes for exchange unless it
decides in its sole discretion to waive such defects or
irregularities.
You may have difficulty selling the
original
notes that you do not exchange.
If you do not exchange your original notes for exchange notes in
the exchange offer, you will continue to be subject to the
restrictions on transfer of your original notes described in the
legend on your original notes. The restrictions on transfer of your
original notes arise because the Issuer issued the original notes
under exemptions from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. In general, you may only offer or sell the
original notes if they are registered under the Securities Act and
applicable state securities laws, or offered and sold under an
exemption from these requirements. Except as required by the
registration rights agreement, the Issuer and the guarantors do not
intend to register the original notes under the Securities Act. The
tender of original notes under the exchange offer will reduce the
principal amount of the currently outstanding original notes. Due
to the corresponding reduction in liquidity, this may have an
adverse effect upon, and increase the volatility of, the market
price of any original notes that you continue to hold following
completion of the exchange offer. Additionally, if a large number
of original notes are exchanged for exchange notes issued in the
exchange offer, it may be more difficult for you to sell your
unexchanged original notes because there will be fewer original
notes outstanding. See “The Exchange Offer—Consequences of Failure
to Exchange Original Notes.”
Risks Relating to
our Indebtedness and
the Notes
Our
substantial indebtedness could impair
our
financial condition and
our
ability to fulfill
our
debt obligations under the notes.
As of September 30, 2015, we had approximately $2.2 billion of
indebtedness, of which approximately $1.5 billion was outstanding
under the Senior Secured Credit Facilities. This indebtedness, as
well as the indebtedness expected to be incurred in connection with
the Meredith Mergers (as described in “Summary — Financings
Relating to Proposed Merger with Meredith Corporation”), could have
important consequences to the holders of the notes, including the
following:
Despite our level of indebtedness
,
we may still be able to incur
substantial additional indebtedness in the future, which could
increase the risks described above.
We may be able to incur substantial additional indebtedness in
the future. The terms of the credit agreement governing the Senior
Secured Credit Facilities and the indentures governing the notes
and the 2021 Notes limit, but do not prohibit, Parent (in the case
of the Senior Secured Credit Facilities) and the Issuer and their
subsidiaries from incurring additional indebtedness. In addition,
as of September 30, 2015, on a combined basis, our revolving credit
facility would have provided for unused commitments of $147 million
(after giving effect to $3 million of outstanding letters of
credit). All of the borrowings under the Senior Secured Credit
Facilities constitute secured indebtedness. If any additional
indebtedness is secured by our assets or the assets of the
guarantors, the indebtedness evidenced by the notes would be
effectively subordinated to such secured indebtedness to the extent
of the value of the collateral securing such indebtedness. If
Parent, the Issuer or any of its subsidiaries incur any additional
indebtedness that ranks equally in terms of payment priority with
the notes and the guarantees thereof, the holders of that
indebtedness will be entitled to share ratably with the holders of
the notes and the guarantees thereof in any proceeds distributed in
connection with any insolvency, liquidation, reorganization,
dissolution or other winding-up of Parent, the Issuer or any of its
subsidiaries. This may have the effect of reducing the amount of
proceeds paid to you in the event Parent, the Issuer or any of its
subsidiaries are subject to any insolvency, bankruptcy or similar
event. If new indebtedness is added to the debt levels of Parent,
the Issuer or any of its subsidiaries, the related risks that we
now face could increase.
Covenants in
our
debt agreements restrict our
or the Issuer’s
business in many ways.
The indentures governing the notes and the 2021 Notes contain,
the credit agreement governing the Senior Secured Credit Facilities
contains, and the indebtedness expected to be incurred in
connection with the Meredith Mergers will contain, restrictive
covenants that limit the ability of Parent (in the case of the
Senior Secured Credit Facilities) and the Issuer and their
subsidiaries to engage in activities that may be in our long-term
best interest, including restrictions on our ability to, among
other things:
A breach of any of the covenants or restrictions under the
indentures governing the notes or the 2021 Notes, or the credit
agreement governing the Senior Secured Credit Facilities, could
result in a default under the applicable indebtedness and could
cross default to other indebtedness. Such a default may allow the
creditors to accelerate the related debt and may result in the
acceleration of any other debt to which a cross-acceleration or
cross-default provision applies. Upon the occurrence of an event of
default under the credit agreement governing the Senior Secured
Credit Facilities, the lenders could elect to declare all amounts
outstanding under the Senior Secured Credit Facilities to be
immediately due and payable and terminate all commitments to extend
further credit under those facilities. If we were unable to repay
the amounts due and payable under the Senior Secured Credit
Facilities, the lenders thereunder could proceed against the
collateral granted to them to secure that indebtedness. We have
pledged a significant portion of our assets as collateral under the
Senior Secured Credit Facilities. If the lenders under the Senior
Secured Credit Facilities or note holders under indentures
accelerate the repayment of our borrowings, we may not have
sufficient liquidity to repay our indebtedness and could be forced
into bankruptcy or liquidation.
As a result of these restrictions, we or the Issuer may be:
These restrictions may affect our ability to grow in accordance
with our strategy. In addition, our financial results, substantial
indebtedness and credit ratings could materially adversely affect
the availability and terms of our financing.
We require
a significant amount of cash to service
our
indebtedness. This cash may not be readily available to
us
.
Our ability to make payments on, or repay or refinance, our
indebtedness, including the ability of the Issuer to service its
obligations under the notes, and fund our ongoing operations and
planned capital expenditures depends largely upon the financial
condition and operating performance of the Issuer and its
subsidiaries. The Issuer’s and its subsidiaries’ future
performance, to a certain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors
that are beyond our control. We cannot be certain that sufficient
cash flow from operations will be generated or that future sources
of capital will be available in amounts sufficient to enable us to
pay the principal, premium, if any, and interest on our
indebtedness, including the ability of the Issuer to make payments
on the notes, or to fund our other liquidity needs.
If our cash flows and capital resources are insufficient to fund
our debt service obligations, we could face substantial liquidity
problems and could be forced to reduce or delay investments and
capital expenditures or to dispose of material assets or
operations, seek additional debt or equity capital or restructure
or refinance our indebtedness, including the notes. We may not be
able to effect any such alternative measures, if necessary, on
commercially reasonable terms or at all and, even if successful,
those alternative actions may not allow us to meet our scheduled
debt service obligations. Our ability to restructure or refinance
our indebtedness will depend on the condition of the capital
markets and our financial condition at that time. Any refinancing
of our indebtedness could be at higher interest rates and may
require us to comply with more onerous covenants, which could
further restrict our business operations. The credit agreement
governing the Senior Secured Credit Facilities, the indenture
governing the Issuer’s 2021 Notes and the indenture governing the
notes restrict, the ability of Parent (in the case of the Senior
Secured Credit Facilities) and the Issuer and its subsidiaries to
dispose of assets and use the proceeds from those dispositions and
may also restrict the ability of Parent and the Issuer and its
subsidiaries to raise debt or equity capital to be used to repay
other indebtedness when it becomes due. We may not be able to
consummate those dispositions or to obtain proceeds in an amount
sufficient to meet any debt service obligations then due. Our
inability to generate sufficient cash flows to satisfy our debt
obligations, or to refinance our indebtedness on commercially
reasonable terms or at all, would materially adversely affect our
financial position and results of operations and may restrict our
current and future operations as well as the Issuer’s ability to
satisfy its obligations under the notes.
We conduct substantially all of our operations through
subsidiaries of the Issuer. Accordingly, repayment of indebtedness
of Parent and the Issuer, including the notes, is dependent on the
generation of cash flow by the Issuer’s subsidiaries and their
ability to make such cash available to us, by dividend, debt
repayment or otherwise. Unless they are guarantors of the notes or
our other indebtedness, they do not have any obligation to pay
amounts due on the notes or our other indebtedness or to make funds
available for that purpose. The subsidiaries of the Issuer may not
be able to, or may not be permitted to, make distributions or other
payments to enable Parent (in the case of the Senior Secured Credit
Facility) and the Issuer to make payments in respect of our
indebtedness, including the notes. Each subsidiary is a distinct
legal entity, and under certain circumstances, legal and
contractual restrictions may limit our ability to obtain cash from
them. While the Credit Agreement, the indenture governing the
Issuer’s 2021 Notes and the indenture governing the notes limit the
ability of the subsidiaries of the Issuer (and Parent in the case
of the Senior Secured Credit Facilities) to incur consensual
restrictions on their ability to pay dividends or make other
intercompany payments to us, these limitations are subject to
qualifications and exceptions. In the event that we do not receive
distributions or payments from the subsidiaries, we may be unable
to make required principal and interest payments on our
indebtedness, including the ability of the Issuer to make payments
on the notes.
If we cannot make scheduled payments on our debt, we will be in
default and holders of the notes and the Issuer’s 2021 Notes could
declare all outstanding principal and interest to be due and
payable, the lenders under the Senior Secured Credit Facilities
could terminate their commitments to loan money and declare all
outstanding principal, interest and other amounts owing to be due
and payable, require that certain obligations be cash
collateralized and foreclose against the assets securing their
borrowings and we could be forced into bankruptcy or liquidation.
All of these events could result in your losing your investment in
the notes.
The Issuer
may be unable to repay or repurchase the notes at maturity.
At maturity, the entire outstanding principal amount of the
notes, together with any accrued and unpaid interest, will become
due and payable. The Issuer may not have the funds to fulfill these
obligations or the ability to renegotiate these obligations. If
upon the maturity date other arrangements prohibit the Issuer from
repaying the notes, it could try to obtain waivers of such
prohibitions from the lenders and holders under those arrangements,
or it could attempt to refinance the borrowings that contain the
restrictions. In such circumstances, if the Issuer was not able to
obtain such waivers or refinance these borrowings, it would be
unable to repay the notes.
The notes and the guarantees will be unsecured and effectively
subordinated to
the Issuer’s
and the guarantors’ indebtedness under the Senior Secured Credit
Facilities and any of
their
other secured indebtedness, to the extent of the value of the
collateral securing such indebtedness.
The notes and the guarantees will be general unsecured
obligations and as a result will be effectively subordinated to all
of the Issuer’s existing and future secured indebtedness and that
of each guarantor, including indebtedness under the Senior Secured
Credit Facilities to the extent of the value of the assets securing
such debt. Additionally, the indenture permits the Issuer and its
subsidiaries to incur additional secured indebtedness in the
future, subject to the limitations described under “Description of
the Exchange Notes—Certain covenants—Limitation on incurrence of
additional indebtedness and issuance of capital stock.” In the
event that the Issuer or a guarantor is declared bankrupt, becomes
insolvent or is liquidated or reorganized, any indebtedness that is
secured and therefore effectively senior to the notes and the
guarantees will be entitled to be paid in full from our assets or
the assets of the guarantor, as applicable, securing such
indebtedness before any payment may be made with respect to the
notes or the affected guarantees. As a result, the holder of the
exchange notes may receive less, ratably, than the holders of
secured debt in the event of our or the guarantors’ bankruptcy,
insolvency, liquidation or reorganization. Holders of the notes
will participate ratably with all holders of our unsecured
indebtedness that is deemed to be of the same class as the exchange
notes, and potentially with all of our other general creditors,
based upon the respective amounts owed to each holder or creditor,
in our and the guarantors’ remaining assets.
As of September 30, 2015, the notes and the guarantees were
effectively subordinated to approximately $1.5 billion of senior
secured indebtedness under the Senior Secured Credit Facilities and
$27.8 million of senior secured indebtedness under the Shield Media
Term Loan, in addition, we had $147 million of revolving borrowing
capacity under our revolving credit facility (after giving effect
to $3 million of outstanding letters of credit and subject to
compliance with financial covenants in the facility), all of which
would have been, when drawn, effectively senior to the notes and
the guarantees.
Our variable rate indebtedness subjects us to interest rate
risk, which could cause our debt service obligations to increase
significantly.
Borrowings under the Senior Secured Credit Facilities are at
variable rates of interest and expose us to interest rate risk. If
interest rates were to increase, our debt service obligations on
the variable rate indebtedness would increase even though the
amount borrowed remained the same, and our net income and cash
flows, including cash available for servicing our indebtedness,
will correspondingly decrease.
Claims of holders of notes will be structurally subordinate to
claims of creditors of the Issuer’s subsidiaries that do not
guarantee the notes.
The original notes are, and the exchange notes will be,
guaranteed on a senior unsecured basis by Parent and each of the
Issuer’s existing and future material wholly owned domestic
subsidiaries that guarantee the Senior Secured Credit Facilities.
The notes will not be guaranteed by the Issuer’s non-wholly owned
subsidiaries, foreign subsidiaries, immaterial subsidiaries and
certain future subsidiaries that are designated as “unrestricted”
in accordance with the terms of the indenture. These subsidiaries
that do not guarantee the notes will have no obligation, contingent
or otherwise, to pay amounts due under the notes or to make any
funds available to pay those amounts, whether by dividend,
distribution, loan or other payment. Accordingly, claims of holders
of the notes will be structurally subordinated to the claims of
creditors of the Issuer’s non-guarantor subsidiaries, including
trade creditors. In the event of the liquidation, dissolution,
reorganization, bankruptcy or similar proceeding of the business of
one of the Issuer’s subsidiaries that is not a guarantor, creditors
of that subsidiary would generally have the right to be paid in
full before any distribution is made to the Issuer, a guarantor or
the holders of the notes. In any of these events, the Issuer may
not have sufficient assets to pay amounts due on the notes with
respect to the assets of that subsidiary. As of September 30, 2015,
approximately $29.1 million of the Issuer’s consolidated
indebtedness was comprised of indebtedness of non-guarantor
subsidiaries.
In addition, the indenture governing the notes, subject to some
limitations, permits these non-guarantor subsidiaries to incur
additional indebtedness and does not contain any limitation on the
amount of other liabilities, such as trade payables, that may be
incurred by these subsidiaries.
Furthermore, the Issuer’s subsidiaries that provide, or will
provide, guarantees of notes will be automatically and
unconditionally released from those guarantees upon the occurrence
of certain events. If any guarantee is released, no holder of the
notes will have a claim as a creditor against that subsidiary, and
the indebtedness and other liabilities, including trade payables
and preferred stock, if any, whether secured or unsecured, of that
subsidiary will be effectively senior to the claim of any holders
of the exchange notes. See “Description of the Exchange
Notes—Guarantees.”
Federal and state law may allow courts, under specific
circumstances, to void the exchange notes and the guarantees,
subordinate claims in respect of the exchange notes and the
guarantees and/or require holders of the exchange notes to return
payments received from the Issuer.
Under the federal bankruptcy laws and comparable provisions of
state fraudulent transfer laws, the exchange notes and the
guarantees could be voided, or claims in respect of the exchange
notes and a guarantee could be subordinated to all of the Issuer’s
and a guarantor’s other respective debt, if the issuance of the
exchange notes or a guarantee was found to have been made for less
than their reasonable equivalent value or fair consideration, and
the Issuer, at the time it incurred the indebtedness evidenced by
the exchange notes, or a guarantor, at the time it incurred the
indebtedness evidenced by the guarantee:
A court might also void the issuance of the exchange notes or a
guarantee, without regard to the above factors, if the court found
that the Issuer issued the exchange notes or the guarantors entered
into their respective guarantees with actual intent to hinder,
delay or defraud its or their respective creditors.
A court would likely find that the Issuer or a guarantor did not
receive reasonably equivalent value or fair consideration for the
exchange notes or the guarantees, respectively, if the Issuer or a
guarantor did not substantially benefit directly or indirectly from
the issuance of the exchange notes. If a court were to void the
issuance of the notes or the guarantees, you would no longer have a
claim against the Issuer or the guarantors. Sufficient funds to
repay the notes may not be available from other sources, including
the remaining guarantors, if any. In addition, the court might
direct you to repay any amounts that you already received from the
Issuer or the guarantors.
In addition, any payment by the Issuer pursuant to the exchange
notes made at a time it was found to be insolvent could be voided
and required to be returned to the Issuer or to a fund for the
benefit of its creditors if such payment is made to an insider
within a one-year period prior to a bankruptcy filing or within 90
days for any outside party and such payment would give the
creditors more than such creditors would have received in a
distribution under Chapter 7 of Title 11 of the United States Code,
as amended (the “Bankruptcy Code”).
The measure of insolvency for purposes of these fraudulent
transfer laws will vary depending upon the law of the jurisdiction
that is being applied in any such proceeding. Generally, however,
an entity is considered insolvent if:
There can be no assurance, however, as to what standard a court
would apply in making such determinations or that a court would
agree with our conclusions in this regard.
In addition, although each guarantee contains or will contain a
provision intended to limit that guarantor’s liability to the
maximum amount that it could incur without causing the incurrence
of obligations under its guarantee to be a fraudulent transfer,
this provision may not be effective to protect those guarantees
from being voided under fraudulent transfer laws, or may reduce
that guarantor’s obligation to an amount that effectively makes its
guarantee of limited value or worthless. There is no way to predict
with certainty what standards a court would apply to determine
whether a guarantor was solvent at the relevant time. It is
possible that a court could view the issuance of guarantees as a
fraudulent transfer. To the extent that a guarantee were to be
voided as a fraudulent transfer or were to be held unenforceable
for any other reason, holders of the exchange notes would cease to
have any claim in respect of the guarantor and would be creditors
solely of the Issuer and of the guarantors whose guarantees had not
been voided or held unenforceable. In this event, the claims of the
holders of the exchange notes against the issuer of an invalid
guarantee would be subject to the prior payment in full of all
other liabilities of the guarantor thereunder. After providing for
all prior claims, there may not be sufficient assets to satisfy the
claims of the holders of the exchange notes relating to the voided
guarantees. Some case law has found that a provision limiting the
amount of a guaranty to the amount that would not make the
guarantor insolvent is unenforceable and, as a result, the
guarantees in that case were found to be fraudulent transfers. We
do not know if that case will be followed if there is litigation on
this point under the indenture. However, if it is followed, the
risk that the guarantees will be found to be fraudulent transfers
will be significantly increased.
Finally, the bankruptcy court may subordinate the claims in
respect of the exchange notes to the claims of other creditors
under the principle of equitable subordination if the court
determines that: (i) the holder of the exchange notes engaged in
some type of inequitable conduct to the detriment of other
creditors; (ii) such inequitable conduct resulted in injury to the
Issuer’s other creditors or conferred an unfair advantage upon the
holder of the exchange notes; and (iii) equitable subordination is
not inconsistent with the provisions of the Bankruptcy Code.
The Issuer may not be able to repurchase the notes upon a change
of control.
Upon the occurrence of specific kinds of change of control
events, the Issuer will be required to offer to repurchase all
outstanding notes, including the exchange notes, at 101% of their
principal amount, plus accrued interest to the purchase date.
Additionally, under the Senior Secured Credit Facilities, a change
of control (as defined therein) constitutes an event of default
that permits the lenders to terminate their commitments to loan
money, declare all outstanding principal, interest and other
amounts owning to be due and payable, require that certain
obligations be cash collateralized and foreclose against the assets
securing their borrowings, and we could be forced into bankruptcy
or liquidation. Also, the Issuer’s 2021 Notes have substantially
identical change of control provisions to the notes, which would
also require the Issuer to make an offer to repurchase such debt
securities at 101% of their principal amount upon a change of
control. The source of funds for any repurchase of the notes,
including the exchange notes, and the Issuer’s 2021 Notes and
repayment of borrowings under the Senior Secured Credit Facilities
will be available cash or cash generated from Parent (in the case
of the Senior Secured Credit Facility) and the operations of the
Issuer and its subsidiaries or other sources, including borrowings,
sales of assets or sales of equity. The Issuer may not be able to
repurchase the notes upon a change of control because it may not
have sufficient financial resources to purchase all of the debt
securities that are tendered upon a change of control and repay its
other indebtedness that will become due. If the Issuer fails in
such circumstances to repurchase the notes, it will be in default
under the indenture. It may require additional financing from third
parties to fund any such purchases, and it may be unable to obtain
financing on satisfactory terms or at all. Further, the Issuer’s
ability to repurchase the notes may be limited by law. In order to
avoid the obligations to repurchase the notes and events of default
and potential breaches of the credit agreement governing the Senior
Secured Credit Facilities, we may have to avoid certain change of
control transactions that would otherwise be beneficial to us.
In addition, certain important corporate events, such as
leveraged recapitalizations, may not, under the indenture,
constitute a “change of control” that would require the Issuer to
repurchase the notes, even though those corporate events could
increase the level of our indebtedness or otherwise adversely
affect our capital structure, credit ratings or the value of such
notes. See “Description of the Exchange Notes—Repurchase at the
option of holders—Change of control.”
The exercise by the holders of notes of their right to require
the Issuer to repurchase the notes pursuant to a change of control
offer could cause a default under the agreements governing our
other indebtedness, including future agreements, even if the change
of control itself does not, due to the financial effect of such
repurchases on us. In the event a change of control offer is
required to be made at a time when the Issuer is prohibited from
purchasing notes, we could attempt to refinance the borrowings that
contain such prohibitions. If we do not obtain consent or repay
those borrowings, the Issuer will remain prohibited from
repurchasing notes. In that case, the Issuer’s failure to
repurchase tendered exchange notes would constitute an event of
default under the indenture which could, in turn, constitute a
default under our other indebtedness. Finally, the Issuer’s ability
to pay cash to the holders of notes upon a repurchase may be
limited by its then existing financial resources.
Holders of the exchange notes offered hereby may not be able to
determine when a change of control giving rise to their right to
have the exchange notes repurchased has occurred following a sale
of “substantially all” of the Issuer’s assets.
One of the circumstances under which a change of control may
occur is upon the sale or disposition of all or “substantially all”
of the Issuer’s assets. There is no precise established definition
of the phrase “substantially all” under applicable law, and the
interpretation of that phrase will likely depend upon particular
facts and circumstances. Accordingly, the ability of a holder of
exchange notes to require the Issuer to repurchase its notes as a
result of a sale of less than all its assets to another person may
be uncertain.
Your ability to sell the exchange notes may be limited by the
absence of an active trading market and an active trading market
may not develop for the exchange notes.
The exchange notes will constitute a new issue of securities
with no established trading market, and the Issuer does not intend
to apply for the listing or quotation of the exchange notes on any
securities exchange or trading market. Accordingly:
In addition, the liquidity of any market for the exchange notes
will depend on a number of factors, including:
Even if an active trading market for the exchange notes does
develop, there can be no assurances that it will continue.
Historically, the market for non-investment grade debt has been
subject to disruptions that have caused substantial volatility in
the prices of securities similar to the exchange notes. We cannot
assure you that the market for the exchange notes will be free from
similar disruptions. Any such disruptions could have an adverse
effect on holders of the exchange notes.
A lowering or withdrawal of the ratings assigned to our debt
securities by rating agencies may increase our future borrowing
costs and reduce our access to capital.
Our debt has a non-investment grade rating, and there can be no
assurance that any rating assigned will remain for any given period
of time or that a rating will not be lowered or withdrawn entirely
by a rating agency if, in that rating agency’s judgment, future
circumstances relating to the basis of the rating, such as adverse
changes, so warrant. Consequently, real or anticipated changes in
our credit ratings will generally affect the market value of the
notes. Credit ratings are not recommendations to purchase, hold or
sell the notes. Additionally, credit ratings may not reflect the
potential effect of risks relating to the structure or marketing of
the notes. Any future lowering of our ratings likely would make it
more difficult or more expensive for us to obtain additional debt
financing. If any credit rating initially assigned to the exchange
notes is subsequently lowered or withdrawn for any reason, you may
not be able to resell your notes without a substantial
discount.
Many of the covenants in the indenture will not apply during any
period in which the notes are rated investment grade by both
S&P and Moody’s.
Many of the covenants in the indenture will not apply during any
period in which the notes are rated investment grade by both
S&P and Moody’s, provided at such time no default or event of
default has occurred and is continuing. Such covenants restrict,
among other things, the Issuer’s ability to pay distributions,
incur debt and enter into certain other transactions. There can be
no assurance that the notes will ever be rated investment grade, or
that if they are rated investment grade, that the notes will
maintain these ratings. However, suspension of these covenants
would allow us to engage in certain transactions that would not be
permitted while these covenants were in force. To the extent the
covenants are subsequently reinstated, any such actions taken while
the covenants were suspended would not result in an event of
default under the indenture. See “Description of the Exchange
Notes—Certain Covenants—Effectiveness of covenants upon an
investment grade rating event.”
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our ratio of earnings to fixed charges
for the periods indicated:
USE OF PROCEEDS
We will not receive any proceeds from the issuance of the
exchange notes in the exchange offer. The exchange offer is
intended to satisfy certain obligations under the registration
rights agreement that the Issuer entered into in connection with
the issuance of the original notes. In exchange for each of the
exchange notes, we will receive original notes in like principal
amount. We will retire or cancel all of the original notes tendered
in the exchange offer. Accordingly, issuance of the exchange notes
will not result in any increase in our outstanding indebtedness or
any change in our capitalization.
THE EXCHANGE OFFER
In connection with the sale of the original notes, the Issuer
and the guarantors entered into a registration rights agreeement,
which the Issuer and the guarantors joined as parties pursuant to a
joinder agreement upon consummation of the LIN Merger. Pursuant to
the registration rights agreement, the Issuer and the guarantors
agreed to file with the SEC a registration statement on the
appropriate form under the Securities Act with respect to a
registered offer to exchange the original notes for the exchange
notes, which exchange notes will have terms substantially identical
in all material respects to the original notes (other than the
transfer restrictions, registration rights and provisions for
additional interest that only apply to the original notes). Upon
the effectiveness of the exchange offer registration statement, the
Issuer will, pursuant to the exchange offer, offer to the holders
of the original notes who are able to make certain representations
the opportunity to exchange their notes for the exchange notes. The
Issuer and the guarantors also agreed to file a shelf registration
statement under certain circumstances.
If the Issuer and the guarantors fail to consummate the exchange
offer on or prior to the date that is 365 days after the Effective
Date or, if applicable, a shelf registration statement is declared
effective but thereafter ceases to be effective or usable in
connection with resales of the notes during the periods specified
in the registration rights agreement (each such event, a
“Registration Default”), then the Issuer and the guarantors will
pay additional interest to each holder of the original notes, with
respect to the first 90-day period immediately following the
occurrence of the first Registration Default in an amount equal to
one-quarter of one percent (0.25%) per annum on the principal
amount of the original notes held by such holder. The amount of the
additional interest will increase by an additional one-quarter of
one percent (0.25%) per annum on the principal amount of original
notes with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of
additional interest for all Registration Defaults of 1.0% per
annum. Immediately upon the cure of all Registration Defaults, the
accrual of additional interest will cease and the interest rate on
the original notes shall revert to the original rate.
Each broker-dealer that receives exchange notes for its own
account in exchange for original notes, where such original notes
were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such
exchange notes. See “Plan of Distribution.”
A copy of each of the registration rights agreement and the
joinder agreement to the registration rights agreement is
incorporated by reference as an exhibit to the registration
statement of which this prospectus is a part.
Terms of the Exchange Offer
The Issuer and the guarantors are offering to exchange an
aggregate principal amount of up to $400 million of original notes
and guarantees thereof for a like aggregate principal amount of
exchange notes and guarantees thereof.
The exchange notes evidence the same debt as the original notes
exchanged for the new notes and will be entitled to the benefits of
the same indenture under which the original notes were issued,
which is governed by New York law. For a complete description of
the terms of the exchange notes, see “Description of the Exchange
Notes.” We will not receive any proceeds from the issuance of the
exchange notes in the exchange offer.
The exchange offer is not extended to holders of original notes
in any jurisdiction where the exchange offer would not comply with
the securities or blue sky laws of that jurisdiction.
As of the date of this prospectus, $400 million aggregate
principal amount of original notes is outstanding and registered in
the name of Cede & Co., as nominee for DTC. Only registered
holders of the original notes, or their legal representatives and
attorneys-in-fact, as reflected on the records of the trustee under
the indenture, may participate in the exchange offer. The Issuer
and the guarantors will not set a fixed record date for determining
registered holders of the original notes entitled to participate in
the exchange offer. This prospectus, together with the letter of
transmittal, is being sent to all registered holders of original
notes and to others believed to have beneficial interests in the
original notes.
This prospectus and the accompanying letter of transmittal
together constitute the exchange offer. Upon the terms and subject
to the conditions set forth in this prospectus and in the letter of
transmittal, the Issuer will accept for exchange original notes,
which are properly tendered on or before the expiration date and
are not withdrawn as permitted below, for exchange notes. The
expiration date for this exchange offer is 11:59 p.m., New York
City time, December 17, 2015, or such later date and time to which
the Issuer, in its sole discretion, extends the exchange offer.
Notes tendered in the exchange offer must be in minimum
denominations of $2,000 and integral multiples of $1,000 in excess
thereof.
Neither the Issuer or any of the guarantors, or any of their
respective boards of directors or management recommends that you
tender or not tender original notes in the exchange offer or has
authorized anyone to make any recommendation. You must decide
whether to tender original notes in the exchange offer and, if you
decide to tender, the aggregate amount of original notes to
tender.
The Issuer expressly reserves the right, in its sole
discretion:
The Issuer will give written notice of any extension, delay,
non-acceptance, termination or amendment as promptly as practicable
by a public announcement, and in the case of an extension, no later
than 9:00 a.m., New York City time, on the next business day after
the previously scheduled expiration date. The notice of extension
will disclose the aggregate principal amount of the original notes
that have been tendered as of the date of such notice. Without
limiting the manner in which the Issuer may choose to make a public
announcement of any extension, delay, non-acceptance, termination
or amendment, the Issuer shall have no obligation to publish,
advertise or otherwise communicate any such public announcement,
other than by making a timely release to an appropriate news
agency, which may be an agency controlled by us. Notwithstanding
the foregoing, in the event of a material change in the exchange
offer, including the waiver of a material condition, the Issuer
will extend the exchange offer period if necessary so that at least
five business days remain in the exchange offer following notice of
the material change.
During an extension, all original notes previously tendered will
remain subject to the exchange offer and may be accepted for
exchange. Any original notes not accepted for exchange for any
reason will be returned without cost to the holder that tendered
them promptly after the expiration or termination of the exchange
offer.
How to Tender
Original
Notes for Exchange
When the holder of original notes tenders, and the Issuer
accepts such notes for exchange pursuant to that tender, a binding
agreement between the Issuer and the tendering holder is created,
subject to the terms and conditions set forth in this prospectus
and the accompanying letter of transmittal. Except as set forth
below, a holder of original notes who wishes to tender such notes
for exchange must, on or prior to the expiration date:
In addition, either:
The term “agent’s message” means a message, transmitted to DTC,
Euroclear or Clearstream, as appropriate, and received by the
exchange agent and forming a part of a book-entry transfer, or
“book-entry confirmation,” which states that DTC, Euroclear or
Clearstream, as appropriate, has received an express
acknowledgement that the tendering holder agrees to be bound by the
letter of transmittal and that the Issuer may enforce the letter of
transmittal against such holder.
The Issuer will not accept any alternative, conditional or
contingent tenders. Each tendering holder, by execution of a letter
of transmittal or by causing the transmission of an agent’s
message, waives any right to receive any notice of the acceptance
of such tender.
Signatures on a letter of transmittal or a notice of withdrawal
must be guaranteed by an eligible institution unless the original
notes surrendered for exchange are tendered:
An “eligible institution” is a firm which is a member of a
registered national securities exchange or a member of the
Financial Industry Regulatory Authority or a commercial bank or
trust company having an office or correspondent in the United
States.
If original notes are registered in the name of a person other
than the signer of the letter of transmittal, the original notes
surrendered for exchange must be endorsed by, or accompanied by a
written instrument or instruments of transfer or exchange, in
satisfactory form as determined by the Issuer in its sole
discretion, duly executed by the registered holder with the
holder’s signature guaranteed by an eligible institution.
The Issuer will determine all questions as to the validity,
form, eligibility (including time of receipt) and acceptance of
original notes tendered for exchange in its sole discretion. The
Issuer’s determination will be final and binding. The Issuer
reserves the absolute right to:
Notwithstanding the foregoing, the Issuer does not expect to
treat any holder of original notes differently from other holders
to the extent they present the same facts or circumstances.
The Issuer’s interpretation of the terms and conditions of the
exchange offer as to any particular original notes either before or
after the expiration date, including the letter of transmittal and
the instructions to it, will be final and binding on all parties.
Holders must cure any defects and irregularities in connection with
tenders of notes for exchange within such reasonable period of time
as the Issuer will determine, unless it waives such defects or
irregularities. None of the Issuer, the exchange agent or any other
person shall be under any duty to give notification of any defect
or irregularity with respect to any tender of original notes for
exchange, nor shall any such person incur any liability for failure
to give such notification.
If a person or persons other than the registered holder or
holders of the original notes tendered for exchange signs the
letter of transmittal, the tendered original notes must be endorsed
or accompanied by appropriate powers of attorney, in either case
signed exactly as the name or names of the registered holder or
holders that appear on the original notes.
If trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity sign the letter of transmittal
or any original notes or any power of attorney, these persons
should so indicate when signing, and you must submit proper
evidence satisfactory to the Issuer of those persons’ authority to
so act unless the Issuer waives this requirement.
By tendering, each holder will represent that:
If any holder or any other person receiving exchange notes from
such holder is an “affiliate,” as defined under Rule 405 of the
Securities Act, of the Issuer or any guarantor, or is engaged in or
intends to engage in or has an arrangement or understanding with
any person to participate in a distribution (within the meaning of
the Securities Act) of the notes in violation of the provisions of
the Securities Act to be acquired in the exchange offer, the holder
or any other person:
Each broker-dealer who acquired its original notes as a result
of market-making activities or other trading activities, and
thereafter receives exchange notes issued for its own account in
the exchange offer, must represent and acknowledge to the Issuer
that it will provide information reasonably requested by it and
comply with the applicable provisions of the Securities Act
(including, but not limited to, delivering this prospectus in
connection with any resale of such exchange notes issued in the
exchange offer). The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an “underwriter” within the
meaning of the Securities Act. See “Plan of Distribution” for a
discussion of the exchange and resale obligations of
broker-dealers.
Acceptance of
Original
Notes for Exchange; Delivery of Exchange Notes Issued in the
Exchange Offer
Upon satisfaction or waiver of all the conditions to the
exchange offer, the Issuer will accept, promptly after the
expiration date, all original notes properly tendered and will
issue exchange notes registered under the Securities Act in
exchange for the tendered original notes. For purposes of the
exchange offer, the Issuer shall be deemed to have accepted
properly tendered original notes for exchange when, as and if the
Issuer has given oral or written notice to the exchange agent, with
written confirmation of any oral notice to be given promptly
thereafter, and complied with the applicable provisions of the
registration rights agreement. See “—Conditions to the Exchange
Offer” for a discussion of the conditions that must be satisfied
before the Issuer accepts any original notes for exchange.
For each original note accepted for exchange, the holder will
receive an exchange note registered under the Securities Act having
a principal amount equal to that of the surrendered original note.
Registered holders of exchange notes issued in the exchange offer
on the relevant record date for the first interest payment date
following the consummation of the exchange offer will receive
interest accruing from the most recent interest payment date on
which interest was paid on the original notes. Under the
registration rights agreement, the Issuer may be required to make
payments of additional interest to the holders of the original
notes under circumstances relating to the timing of the exchange
offer.
In all cases, the Issuer will issue exchange notes for original
notes that are accepted for exchange only after the exchange agent
timely receives:
If for any reason set forth in the terms and conditions of the
exchange offer the Issuer does not accept any tendered original
notes, or if a holder submits original notes for a greater
principal amount than the holder desires to exchange, the Issuer
will return such unaccepted or nonexchanged notes without cost to
the tendering holder. In the case of original notes tendered by
book-entry transfer into the exchange agent’s account at DTC,
Euroclear or Clearstream, the nonexchanged notes will be credited
to an account maintained with DTC, Euroclear or Clearstream. The
Issuer will return the original notes or have them credited to DTC,
Euroclear or Clearstream accounts, as appropriate, promptly after
the expiration or termination of the exchange offer.
Book-Entry Transfer
The participant should transmit its acceptance to DTC, Euroclear
or Clearstream, as the case may be, on or prior to the expiration
date or comply with the guaranteed delivery procedures described
below. DTC, Euroclear or Clearstream, as the case may be, will
verify the acceptance and then send to the exchange agent
confirmation of the book-entry transfer. The confirmation of the
book-entry transfer will include an agent’s message confirming that
DTC, Euroclear or Clearstream, as the case may be, has received an
express acknowledgement from the participant that the participant
has received and agrees to be bound by the letter of transmittal
and that the Issuer may enforce the letter of transmittal against
such participant. Delivery of exchange notes issued in the exchange
offer may be effected through book-entry transfer at DTC, Euroclear
or Clearstream, as the case may be. However, the letter of
transmittal or...
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