SYS-CON MEDIA Authors: Michael Bushong, PR.com Newswire, David Smith, Tim Crawford, Kevin Benedict

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Liberman Broadcasting, Inc., LBI Media Holdings, Inc. And LBI Media, Inc. Announce Amendments To Private Exchange Offers And Solicitation Of Consents And Extension Of The Expiration Date Of Private Exchange Offers And Solicitation Of Consents

BURBANK, Calif., Dec. 11, 2012 /PRNewswire/ -- LBI Media, Inc. ("Media"), LBI Media Holdings, Inc. ("Holdings") and Liberman Broadcasting, Inc. ("Parent" and together with Media and Holdings, the "Companies") announced today that they have amended certain terms of their previously announced private exchange offers (the "Exchange Offers") with respect to Media's 8½% senior subordinated notes due 2017 (the "Old Senior Subordinated Notes") and Holdings' 11% senior discount notes due 2013 (the "Discount Notes", and together with the Old Senior Subordinated Notes, the "Old Notes") and solicitation of consents with respect to the Old Notes (the "Old Notes Consents"), and extended the expiration date for the Exchange Offers and solicitation of Old Notes Consents to midnight, New York City time, on December 24, 2012 (the "Expiration Date").

The Exchange Offers have the support of the majority of Media's 9¼% Senior Secured Notes due 2019 (the "First Priority Senior Secured Notes"), the Old Senior Subordinated Notes and the Discount Notes.  The Companies do not expect to extend the Exchange Offers after the scheduled Expiration Date.  As detailed below, the Companies announced today preliminary results of the Exchange Offers as of 5:00 p.m., New York City time, on December 10, 2012 with:

(i) approximately $174.6 million, or 76.3%, of the outstanding principal amount of Old Senior Subordinated Notes validly tendered and not withdrawn; and

(ii) approximately $30.4 million, or 72.7%, of the outstanding principal amount of Discount Notes not held by Holdings validly tendered and not withdrawn.

Holders of the Discount Notes should review the Offering Memorandum (as defined below), as it describes the limitation on Media's ability to repay the Discount Notes, which ability will be limited to 10% of the outstanding Discount Notes not held by Holdings at maturity, or a maximum amount of approximately $4.2 million.

The terms of the Exchange Offers were initially described in a confidential offering memorandum and consent solicitation statement, dated July 17, 2012 (the "Initial Offering Memorandum").  The Initial Offering Memorandum was supplemented by the Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated July 24, 2012, the Second Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated October 12, 2012, the Third Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated October 18, 2012, the Fourth Supplement to the Confidential Offering Memorandum and Consent Solicitation dated October 26, 2012, the Fifth Supplement to the Confidential Offering Memorandum and Consent Solicitation dated November 2, 2012, the Sixth Supplement to the Confidential Offering Memorandum and Consent Solicitation dated November 19, 2012 and the press releases issued by Media or Media and Holdings or the Companies on August 14, 2012, August 30, 2012, September 21, 2012, September 28, 2012, October 5, 2012, October 12, 2012, October 26, 2012, November 2, 2012, November 13, 2012, November 19, 2012, December 4, 2012 and December 10, 2012 (the "Prior Supplements").  The amended terms of the Exchange Offers are more fully described in a Seventh Supplement to the Confidential Offering Memorandum and Consent Solicitation (the "Offering Memorandum Supplement"), dated December 11, 2012 (the Initial Offering Memorandum as supplemented by the Prior Supplements and the Offering Memorandum Supplement, the "Offering Memorandum").  Copies of the Offering Memorandum Supplement will be delivered to eligible holders of Old Senior Subordinated Notes and Discount Notes.

The Companies are revising the Exchange Offers to offer 11½%/13½% PIK toggle second priority secured subordinated notes due 2020 of Media (the "Second Priority Secured Subordinated Notes") and warrants to purchase shares of Class A common stock, par value $0.001 of Parent (the "Warrants") for any and all outstanding Old Senior Subordinated Notes in lieu of their previously offered "Second Priority Senior Secured Notes."  The Companies are further revising the Exchange Offers to offer either Second Priority Secured Subordinated Notes in lieu of their previously offered "Second Priority Senior Secured Notes" or the Holdings Notes (the Holdings Notes together with the Second Priority Secured Subordinated Notes, the "New Notes") for any and all of the outstanding Discount Notes.

The terms of the Second Priority Secured Subordinated Notes (formerly "Second Priority Secured Notes") have been revised so that such notes will be subordinated in right of payment to all existing and future senior debt of Media and the applicable subsidiary guarantors (including the First Priority Senior Secured Notes and Media's revolving credit facility (the "Senior Secured Revolver")) and the Second Priority Secured Subordinated Notes and related subsidiary guarantees will be senior in right of payment with the Old Senior Subordinated Notes and related subsidiary guarantees.  Previously the terms of the Second Priority Secured Subordinated Notes (formerly "Second Priority Senior Secured Notes") provided that such notes would not be subordinated in right of payment to all existing and future senior debt of Media and the subsidiary guarantors.  Interest on the Second Priority Secured Subordinated Notes has also been revised such that interest on the Second Priority Secured Subordinated Notes (x) on or prior to November 15, 2015, will accrue from the issue date of the Second Priority Secured Subordinated Notes, at the election of Media prior to each applicable interest period, at a rate of (i) 11½% per annum, payable in an amount equal to 8¾% per annum payable in cash, plus an amount equal to 2¾% per annum in additional PIK Second Priority Secured Subordinated Notes (as defined in the Offering Memorandum) or (ii) 13½% per annum, payable in an amount equal to 4¼% per annum payable in cash, plus an amount equal to 9¼% per annum in additional PIK Second Priority Secured Subordinated Notes and (y) from and after November 15, 2015, will accrue at a rate of 11½% per annum, payable in an amount equal to 8¾% per annum payable in cash, plus an amount equal to 2¾% per annum in additional PIK Second Priority Secured Subordinated Notes; provided that the last interest payment will be entirely in cash. In each case, the amount of interest payable will be calculated based on the outstanding principal amount of the Second Priority Secured Subordinated Notes as of the beginning of such interest period (after giving effect to any issuance of PIK Second Priority Secured Subordinated Notes in respect of the immediately preceding interest period).  The terms of the Warrants have been revised to reflect the amended terms of the interest rate on the Second Priority Secured Subordinated Notes.  Accordingly, the Clawback (as defined under the Warrants and in the Offering Memorandum) has been revised to amend the definition of Cash Pay Election (as defined under the Warrants and in the Offering Memorandum) to reflect the interest rate on the Second Priority Secured Subordinated Notes of 11½% per annum, payable in an amount equal to 8¾% per annum payable in cash, plus an amount equal to 2¾% per annum in additional PIK Second Priority Secured Subordinated Notes.

Media is also now soliciting consents to certain proposed amendments to the indenture governing the Old Senior Subordinated Notes, consistent with the amended terms of the Exchange Offers.  Holdings is continuing to solicit consents to proposed amendments to the indenture governing the Discount Notes. 

In addition to the "General Conditions" described in the Initial Offering Memorandum and the Prior Supplements, the Exchange Offers and solicitation of Old Notes Consents will also be conditioned on the valid tender and acceptance (which are not revoked) of at least a majority of the aggregate principal amount of the Old Senior Subordinated Notes entitled to vote and consent to the proposed amendments to the indenture governing the Old Senior Subordinated Notes Indenture in the Exchange Offers. 

The Companies are amending certain other terms of the Exchange Offers, as more fully described in the Offering Memorandum Supplement.

The Companies announced today additional preliminary results of the Exchange Offers and the solicitation of Old Notes Consents. As of 5:00 p.m., New York City time, on December 10, 2012, (i) approximately $174.6 million, or 76.3%, of the outstanding principal amount of Old Senior Subordinated Notes had been validly tendered and not withdrawn, and (ii) approximately $30.4 million, or 72.7%, of the outstanding principal amount of Discount Notes not held by Holdings had been validly tendered and not withdrawn, and the corresponding amount of Old Notes had validly delivered consents to the proposed amendments to the indentures governing the Old Notes in connection with the solicitation of Old Notes Consents.  In addition, certain holders of the Old Senior Subordinated Notes and the Discount Notes have already tendered, or have agreed to tender (subject to certain terms and conditions contained in agreements between the parties), approximately $120.2 million, or 52.7%, of the outstanding principal amount of the Old Senior Subordinated Notes not held by Media or Media's affiliates and approximately $24.0 million, or 58.5%, of the outstanding principal amount of the Discount Notes not held by Holdings or Holdings' affiliates, and have delivered, or have agreed to deliver (subject to certain terms and conditions contained in agreements between the parties), their Old Notes Consents to the proposed amendments to the indentures governing the Old Notes.

The Exchange Offers and solicitation of Old Notes Consents remain subject to the satisfaction or waiver of the Exchange Offer Conditions (as defined in the Offering Memorandum).  As discussed above the Companies have reached agreements, subject to certain terms and conditions, with parties that represent a majority of the aggregate principal amount of the Old Senior Subordinated Notes and the Discount Notes, pursuant to which such parties have validly tendered, or have agreed to validly tender, their respective Old Senior Subordinated Notes and Discount Notes, as applicable, and have delivered, or have agreed to deliver, their consents to the proposed amendments to the indenture governing the Old Senior Subordinated Notes or Discount Notes, as applicable.  In addition, Media has reached agreement, subject to certain terms and conditions, with parties that represent a majority of the aggregate principal amount of the First Priority Senior Secured Notes, pursuant to which such parties have already delivered, or have agreed to deliver, their Solicitation Consents (as defined below). As a result of the amended terms of the Exchange Offers and solicitation of Old Notes Consents, Media must obtain an additional consent from the lenders of a majority of the loans, commitments and letters of credit exposure under Media's Senior Secured Revolver to certain amendments to the Senior Secured Revolver.  The prior amendment to the Senior Secured Revolver that was previously announced and the terms of which were disclosed in the Sixth Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated November 19, 2012 will not become effective as a result of the amended terms of the Exchange Offers. 

Old Notes may still be tendered and Old Notes Consents may still be delivered until midnight, New York City time, on December 24, 2012 unless the Exchange Offers or solicitation of Old Notes Consents is terminated or withdrawn earlier, or unless the Exchange Offers or solicitation of Old Notes Consents is further extended.  In addition, the Companies have the right to amend, terminate or withdraw any of the Exchange Offers or solicitation of Old Notes Consents, at any time and for any reason, including if any of the conditions to the Exchange Offers or solicitation of Old Notes Consents are not satisfied.  The Companies also announced today the extension of the Withdrawal Deadline (as defined in the Offering Memorandum) for the Exchange Offers and solicitation of Old Notes Consents until midnight, New York City time, on December 24, 2012.

Holders who previously tendered Old Notes for the consideration described in the Initial Offering Memorandum and Prior Supplements will be deemed to have tendered for the consideration described in the Offering Memorandum Supplement.  Accordingly, holders who were to receive Second Priority Senior Secured Notes will now receive Second Priority Secured Subordinated Notes.  Holders of Discount Notes who have previously tendered Discount Notes will also be deemed to have kept the same selection previously made between Second Priority Secured Subordinated Notes (formerly "Second Priority Senior Secured Notes") and Holdings Notes. If holders who previously tendered Old Notes do not desire to receive the consideration described in the Offering Memorandum Supplement they must withdraw the tender of their Old Notes prior to the Withdrawal Deadline.

In addition, holders of Old Senior Subordinated Notes who previously tendered (and did not withdraw) Old Senior Subordinated Notes in the Exchange Offers will be deemed to have validly delivered (and not revoked) consents to the proposed amendments to the indenture governing the Old Senior Subordinated Notes.  If holders who previously tendered Old Senior Subordinated Notes in the Exchange Offers prefer not to consent to the proposed amendments to the indenture governing the Old Senior Subordinated Notes, such holders must validly withdraw the tender of their Old Senior Subordinated Notes prior to the Withdrawal Deadline.  Holders who desire to tender their Old Senior Subordinated Notes pursuant to the Exchange Offers must consent to the proposed amendments to the indenture governing the Old Senior Subordinated Notes.   

Concurrently with the Exchange Offers, Media is also soliciting consents (the "Solicitation Consents") from holders of its First Priority Senior Secured Notes to certain amendments to the indenture governing the First Priority Senior Secured Notes (the "First Priority Senior Secured Notes Consent Solicitation").  The terms of the First Priority Senior Secured Notes Consent Solicitation have also been amended to, among other things, reflect the new terms of the Exchange Offers and revise the interest rate payable on the First Priority Senior Secured Notes to 10% per annum.  

The expiration date for the First Priority Senior Secured Notes Consent Solicitation is extended to midnight, New York City time, on December 24, 2012 or such later time and date to which the First Priority Senior Secured Notes Consent Solicitation is extended (the "First Priority Senior Secured Notes Consent Solicitation Expiration Date"). Solicitation Consents may be revoked at any time on or prior to midnight, New York City time, on December 24, 2012. 

The terms of the solicitation of Solicitation Consents are described in the Consent Solicitation Statement, dated July 17, 2012, as supplement by the Supplement, dated October 12, 2012, the Second Supplement, dated October 18, 2012, the Third Supplement, dated November 2, 2012, the Fourth Supplement, dated November 19, 2012 and as further supplemented by the Fifth Supplement dated December 11, 2012 (collectively, the "Consent Solicitation Statement").

If Media receives the requisite consents to the First Priority Senior Secured Notes Consent Solicitation, Media will execute a supplemental indenture (the "Supplemental Indenture") on or soon after the First Priority Senior Secured Notes Consent Solicitation Expiration Date, but not later than the date the Exchange Offers are consummated.  The Supplemental Indenture, by its terms, will become effective only upon the consummation of the Exchange Offers. 

As of 5:00 p.m., New York City time, on December 10, 2012, approximately $64.7 million, or 29.4%, of the outstanding principal amount of First Priority Senior Secured Notes had validly delivered Solicitation Consents.  In addition, holders of approximately $133.5 million, or 60.7%, of the outstanding principal amount of the First Priority Senior Secured Notes have already delivered, or have agreed to deliver (subject to certain terms and conditions contained in agreements between the parties), their Solicitation Consents.

The New Notes and the Warrants will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be transferred or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Exchange Offers are being made only to qualified institutional buyers and accredited investors and outside the United States to persons other than U.S. persons. The Exchange Offers are made only by, and pursuant to, the terms set forth in the Offering Memorandum, and the information in this press release is qualified by reference to the Offering Memorandum and the accompanying consent and letter of transmittal and beneficial ownership information form.

This press release shall not constitute a solicitation of consents, an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. No recommendation is made as to whether holders of the securities should tender their securities or give their consent.

D.F. King & Co., Inc. ("D.F. King") is acting as the Information Agent and Exchange Agent for the Exchange Offers and solicitation of the Discount Notes Consents and the Solicitation Consents. Requests for the Offering Memorandum, the accompanying consent and letter of transmittal and beneficial ownership information form, the Consent Solicitation Statement, the accompanying consent and letter of transmittal and any supplements thereto may be directed to D.F. King at (212) 269-5550 (for brokers and banks) or (800) 431-9645 (for all others).

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Media's, Holdings' and Parent's current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Media, Holdings and Parent undertake no obligation to update or revise any forward-looking statements to reflect developments or information obtained after the date of this press release, except as required by law.

SOURCE LBI Media, Inc.

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