BuzzFeed Inc. (NASDAQ:BZFD) has announced amendments to the governing terms of its 8.50% Convertible Senior Notes due in 2026 through a second supplemental indenture. The changes, effective as of February 28, 2024, follow the consent solicitation statement issued on February 21, 2024, and involve modifications to the original indenture dated December 3, 2021.
The amendments authorize the sale of assets related to BuzzFeed Media's Complex Networks brand, as outlined in the Asset Purchase Agreement with Commerce Media Holdings, LLC, dated February 21, 2024.
The updated terms introduce a "Specified Disposition" concept, which replaces the previous de minimis exception for asset sales. This allows for disposals with a fair market value of up to $5 million in aggregate and additional sales up to $1 million per transaction, provided the total does not exceed $10 million in aggregate value.
The covenant relating to Intellectual Property in Section 4.19 of the indenture has been revised to include the Specified Disposition concept as a de minimis exception for transfers of specified intellectual property. The amendment also excludes asset sales where net proceeds are applied under the mandatory redemption provision from this covenant.
Moreover, the covenant entitled "Asset Sales" in Section 4.18 of the indenture has been modified to remove certain requirements regarding the application of net proceeds from asset sales.
The indenture's Article 16, which covers redemption, now mandates the redemption of the Notes with $30,900,000 of the net proceeds from the Complex Networks Sale and 95% of the net proceeds from any future asset sales. Any remaining funds may be utilized by BuzzFeed or its subsidiaries in ways not prohibited by the indenture.
The company is also restricted from purchasing Notes on the open market or through other means unless the purchase price is equal to 100% of the principal amount and the offer is extended to all note holders on a pro rata basis.
These amendments are expected to provide BuzzFeed with greater flexibility in managing its assets and capital structure. The information is based on a recent SEC filing by BuzzFeed.
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