December 5, 2011 / 1:06 AM / in 6 years

UPDATE 1-Hedge funds snap up more of CVC's Nine debt-sources

By Stephen Aldred

HONG KONG, Dec 5 (Reuters) - BNP Paribas and Commonwealth Bank of Australia have sold a total of around A$130 million ($133 million) of senior debt in global buyout fund CVC Asia Pacific’s Nine Entertainment TV network, with hedge funds buying most of the debt, three sources told Reuters.

The sales increase the votes held by hedge funds, ahead of a looming vote by lenders on whether to extend A$2.6 billion of debt for another two-and-a-half years, the sources said.

BNP sold around A$90 million of the debt while CBA sold around A$37 million, and both sales were at around 87 percent of par, the three sources said.

BNP and CVC declined to comment.

A spokeswoman for CBA said the bank did not comment on market speculation.

Nine is one of the largest private-equity owned companies in Australia, bought by CVC at the height of the buyout boom in 2006.

CVC spent about A$5.3 billion in debt and equity in acquiring the company from media baron James Packer.

Hedge funds could hold up to 40 percent of the senior debt in Nine, loans traders and bankers who own the senior debt told Reuters separately.

A report in the Australian Financial Review said hedge funds Oaktree Capital, Canyon Partners and Anchorage Advisors now hold more than A$500 million of Nine’s senior debt, about a fifth of the total.

CVC last month asked for a two-and-a-half year extension on about A$2.6 billion in senior debt on the asset.

An extension on the deadline would give CVC time to work out how to restructure the debt, and perhaps allow for stronger growth in advertising revenues in the Australian television business after a cyclical slowdown.

Banking sources have said they do not expect the majority of Nine’s senior lenders to approve a restructure of the debt at this stage.

The hedge funds could hold out to swap some debt for equity to gain greater control of the Nine business, one source said.

In addition to the senior debt, Nine has about A$900 million in mezzanine debt which falls due in April 2014.

The bulk of the mezzanine debt is held by Goldman Sachs , a source familiar with the matter told Reuters.

CVC had to shelve plans for a multibillion-dollar float of Nine earlier this year as equity markets turned sour, and advertising revenue growth slowed in line with weak consumer spending.

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