Liberty Media LLC said it would sweeten the terms on $1.75 billion in bonds and offer holders a higher interest rate in exchange for giving up the right to make the media company buy back the debt now.
Liberty will raise the interest rate on the convertible notes due in 2023, its largest class of bonds, to 3.125 percent from 0.75 percent, Doug las County-based Liberty said in a statement. The company also promised to pay the bonds in cash, giving up a right to pay in shares of Time Warner Inc. instead.
The move would keep Liberty chairman John Malone from having to refinance the debt in a rattled bond market, in exchange for about $41.6 million of extra interest payments yearly. High-yield media bonds have lost about 10 percent of their value this year, more than double the decline of the average junk issue, Merrill Lynch & Co. index data show.
Liberty spokesman John Orr declined to comment. The proposed terms are being reviewed with a trustee who represents the interests of bondholders, the company said in the statement. The bonds are rated BB by Standard & Poor’s, or two levels below investment grade.
The bonds rose about 2.4 cents to 103.3 cents in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The securities were the most actively traded among institutional investors, with 104 trades of $1 million or more reported.
