Refinancing Risk

You're the CFO of a newspaper company (we're running the Wayback Machine 20 years here) and you stupidly had all 8 tranches of your debt come due the same year.

The problem? That year is 2008. It's November. And you have to refinance $1.2 billion worth of bonds in a market that's just sayin', "Nuh-uh."

Why did you do this? Why did you have all the bonds come due at the same time? Had you laddered them (like...having $200 million come due each year for 6 years sequentially), there'd have been no stress. But this was not the case. At all. And...can you tell this is a true story? The company: Gannett Newspapers, owners of USA Today and a bunch of local papers and TV stations. The company almost went bankrupt, but they were just able to get credit extensions and enough dough to get them into 2009, when their refinancing took hold and their equity bounced big off of a mid-single-digit bottom.

Kids, don't let this happen to you.