MediaNews Group announces bankruptcy plan

MediaNews Group announced on Friday that its holding company, Affiliated News, will file for bankruptcy in the near future. This follows agreement of a debt restructuring in which senior lenders will swap their loans for equity, leading to a reduction in the newspaper publisher’s debt from $930 million to $165 million.

Recovery expectations for the loans are low. According to Creditflux’s CLO Master, the widely held term loans C recently traded at 21 cents in the dollar. The loans are held in 15% of US CLOs, according to CLO Master. However, the bankruptcy will have little impact on structured credit investors, since most CLOs have already been treating the loans as defaulted since early in 2009.