Nexstar Broadcasting Group, Inc.
Thesis
I recommend buying the Nexstar 12% Senior Subordinated PIK Notes at 63. They are trading 18 points cheap of the 7% Senior Subordinated Notes and 14 points cheap of the 7% Senior Subordinated PIK Notes, despite being pari passu in the capital structure. The disparity is due to the lack of a guarantee from Mission, which is deemed worthless given the current financials.
Did it work?
The long thesis on the Nexstar 12% PIK Notes at 63 clearly played out: the notes returned +191% on price over 16.5 years, implying a price near 183, consistent with the notes converging toward their pari passu peers and ultimately toward par as the perceived Mission guarantee discount proved immaterial and Nexstar's credit improved. A distressed bond bought at 63 more than tripling in price validates the core claim that the notes were substantially cheap relative to identical-priority paper. With the full horizon long since elapsed and the return strongly in the stated direction, this is a decisive success.