Susan Luzzaro 4:30 p.m., March 10
North County Times Parent Selling Junk Bonds to Survive
The Wall Street Journal this morning (April 11) tells how Lee Enterprises, the severely debt-laden parent of the North County Times, is peddling junk bonds that could enable it to "pay off its obligations and give it a shot for survival," says the Journal. But the sale of these junk bonds has riled a group of vulture investors that have been buying Lee's debt, hoping that they could turn these holdings into an ownership stake in Lee -- giving the vultures a big stake in the St. Louis Post Dispatch and Arizona Daily Star, among other papers. The vultures include Monarch Alternative Capital, Alden Global Capital, Marblegate Asset Management, and a unit of Goldman Sachs, says the Journal. Lee's $1 billion debt is roughly six times its cash flow; many have felt Lee would not be able to raise money to pay back banks loans that mature in April of next year. Lee was prospering as an owner of small and midsize newspapers until it paid too much for Pulitzer in 2005, a chain of 14 papers including the St. Louis Post-Dispatch. Lee's stock closed Friday at $2.97. That's up from the low of 27 cents in March of 2009, but down from almost $35 in 2007.