Hedge funds buy more of Nine's senior debt - report

Sources close to the sale told Reuters that BNP sold around A$90 million of the debt and CBA sold around A$37 million. The purchase is said to increase the voting capacity of hedge funds ahead of a critical vote on whether Nine's A$2.6 billion of debt should be extended for another two-and-a-half years. CVC and Nine hope that a multi-year delay would give them the opportunity to restructure the loans or recoup costs through advertising revenues. In exchange, lenders are thought to have been offered an upfront fee and a higher interest rate.

However, reports in recent weeks suggested that CVC's proposed debt restructuring plan is expected to be rejected, following preliminary talks between the private equity firm and lenders. Any renegotiation of the terms of Nine's A$2.6 billion in senior loans is instead unlikely to take shape until nearer to the February 2013 repayment deadline.

Earlier reports noted that more than 80 lenders were given four weeks to decide beginning at the end of November. A two-thirds majority is required to approve the changes.

Of the lenders, hedge funds are said to hold up to 40% of the debt, with Oaktree Capital, Canyon Partners and Anchorage Advisors believed to hold more than A$500 million, about one-fifth of the total senior debt.

Reuters added that Nine also has about A$900 million in mezzanine debt, due in April 2014, which is largely held by Goldman Sachs.

The movements come months after Nine posted an EBITDA of A$414.9 million for the year ending June 2011 - up 16.4% year-on-year - which prompted the firm to tell its lenders in July that the EBITDA for the coming year should stand at around $430 million.

Nine is one of the largest private equity-owned companies in Australia, bought by CVC at the height of the buyout boom in 2006 for about A$5.3 billion from media baron James Packer.

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• Distressed