Less is more for ITV

June 25, 2009

itvFaced with big debts and falling revenues, companies across the world are hiring experts and pondering options.

One option is to swap old bonds for new, exchanging looming maturities for redemptions a few years off. Another is to buy back debts trading at discounted prices.

UK broadcaster ITV (ITV.L) is the latest company to swap its bonds, one of the most successful of a string of exchanges Reuters predicted back in April.

ITV said today that 54 percent of holders of its 2011 bonds were happy to swap their holdings for a mix of cash and new bonds, maturing in 2014. A moderate success, said analysts.

However, this result came only after the company sweetened the deal with an increase in the coupon after sobering talks with some big investors.

Given the success of ITV’s swap we can expect the flow of exchanges to continue as many lenders continue to prefer pain deferred rather than risking pushing borrowers into default.

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