Postmedia Network Inc. refinances debt to 2023

Postmedia Network Canada Corp. announced Friday that it has reached a refinancing deal that will effectively give the company an additional two years before it has to repay its first lien notes.

Andrew MacLeod, president and chief executive officer of Postmedia, said that the deal gives the company more time and flexibility to execute management’s strategy to grow digital revenues.

“Ultimately this is about getting digital revenue to a

This is about getting digital revenue to a place that it is growing at a greater rate than the revenue declination on the legacy side.

place that it is growing at a greater rate than the revenue declination on the legacy side,” MacLeod said.

In 2016, Postmedia issued $225 million in first lien notes with a maturity of July 2021. Since then, Postmedia has paid down around 58 per cent of that debt, leaving $94.8 million outstanding.

The deal announced Friday will see the company retire those first lien notes through the issuance of $95.2 million in new first lien notes to Canso Investment Counsel Ltd. Postmedia said that the deal is on substantially similar terms, at an interest rate of 8.25 per cent. The new debt will come to maturity on July 15, 2023.

As part of the deal, Postmedia will also extend the maturity of its second lien notes to January 2024.

MacLeod said that the company’s debt has had some positive effects, in that it has been the imperative to drive digital transformation inside Postmedia and has spurred management to make difficult choices.

“I think what you’re now seeing across the media landscape is an acknowledgment that you need to right-size your cost structure in the face of ongoing revenue declination.”

MacLeod said the two-year extension to the company’s debt doesn’t mean that July 2023 is a make-it-or-break-it date for management’s larger business strategy.

“This is really about extending the timeframe we have to accelerate our strategy and to continue to get digital to grow,” he said.

The refinancing is expected to close on or around Sept. 9.

As part of the deal Postmedia will also no longer hold quarterly earnings calls.