Regional sports network operator Diamond Sports Holdings has skipped a $140 million debt payment due Wednesday, formally starting a 30-day grace period during which the Sinclair Broadcast group subsidiary is near-certain to file for a bankruptcy reorganization.
The company issued a press release Wednesday morning confirming it is skipping the payment.
Prudential Investments is said to be the largest secured and unsecured creditor, according to people familiar with the bond holders who asked not to be named, because they weren’t authorized to discuss the matter publicly. A representative for Prudential didn’t immediately respond to a request for comment.
Diamond had been widely expected to miss today’s payment.
In the Wednesday release, Diamond said it is using the 30-day grace period “to continue progressing its ongoing discussions with creditors and other stakeholders regarding potential strategic alternatives and deleveraging transactions to best position Diamond Sports Group for the future.”
Diamond has a month’s grace period by which it can make the $140 million interest payment and not break debt covenants with lenders. However, it is unlikely to make the payment in that period. Instead, the company is preparing a Chapter 11 filing to reorganize the business and its nearly $9 billion debt load, according to multiple sources familiar with the business.
In the meantime, Diamond stated it expects “business will continue as usual” and sports broadcasts at its 19 regional sports networks will continue unaffected.
The missed Wednesday payment specifically affects unsecured, second-lien secured and third-lien secured notes maturing in 2026 and 2027. Prudential, the asset management and insurance giant with more than $1 trillion in asset under management, may not hold those notes specifically among its Diamond debt.
(This story has been updated with details throughout.)
