The Firm represented American Media Inc. in connection with the restructuring of its debt, which was completed on January 30, 2009. The restructuring was effected pursuant to cash tender offers and consent solicitations for approximately $570 million of American Media’s outstanding senior subordinated notes and was driven by the fact that if American Media’s senior subordinated notes due 2009 were not refinanced by February 1, 2009, the indebtedness under its credit agreement would have automatically accelerated. Bondholders who participated in the tender offers purchased their pro rata share in American Media’s concurrent private placement of $21,245,380 of 9% Senior PIK Notes due 2013, $300,000,000 of 14% Senior Subordinated Notes due 2013 and 5,694,480 shares of its common stock. The proceeds received for the notes and the common stock were used to pay for the tender offers. With the successful completion of these transactions, the tendering bondholders now own 95% of American Media’s common stock and American Media’s debt has been reduced by $227.2 million. In addition, American Media’s credit agreement was amended and restated, and its existing equityholders received warrants to acquire 20% of American Media’s equity above its current enterprise value.
The Simpson Thacher team for the transactions included Ken Wallach, Gil Strauss, Sebastian Cucullu, Carol Daniel, Lia Toback and Mark de Figueiredo (Capital Markets and Corporate Governance); Patrick Ryan, Christian Struck, Jessica Tuchinsky and Christine Chang (Credit); Peter Pantaleo, Mark Thompson, Ken Ziman, Simone Bono, Victor Chai and Terry Sanders (Bankruptcy Advice and Preparation); Marcy Geller, Jonathan Cantor and Sean Austin (Tax); Tristan Brown, Victoria Stewart and Grace Lin (Executive Compensation & Employee Benefits); and Krista McManus and Bryan Herzbach (Real Estate).