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 investment thesis to buy Nexstar's 12% Senior Subordinated PIK Notes at 63 has significantly played out, with a price performance of +201.6% over 198 months. The substantial return indicates that the market has recognized the value of these notes relative to the others mentioned, despite the initial concerns regarding the lack of a guarantee from Mission. This aligns with the long position taken in the pitch, confirming the thesis's validity.
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