In the case of Melnyk, reworking meant finding new lenders.
Synopisis
Melnyk had been negotiating a new loan to cover the team’s $130-million debt held by a syndicate of eight banks including Scotiabank and CIT Group of New York.
The loan expired at year-end 2011 and had been operating under a series of extensions, with appropriate financial penalties applied. Melnyk was being forced to cover millions of dollars in extra debt interest payments until he arrange for new lenders.
This re-financing was necessary due to the fact some members of the syndicate had decided to get out of the business of lending to sports teams.
Melnyk was negotiating with a new group of banks and had been confident that fresh financing was within his grasp. But the arrangement was still tentative, and proved vulnerable to second-guessing and when rumours of an NHL lockout surfaced, a member of the proposed new syndicate dropped out.
When the lockout became fact, convincing another lender to fill the gap proved impossible.
Hence Melnyk was forced to continue with the original group of lenders, and their regime of extra fees.
It was only after the league returned to action, allowing the Senators to generate revenues from ticket sales, that Melnyk finally arranged $150 million in fresh financing. He signed a four-year deal in April 2013 with a pair of U.S. specialty funds.
FYI I can find no reference anywhere to the interest rate or fees being charged on the loan.
The NHL loan arrangement is being worked with CRA and is likely to be resolves in the near future. When that occurs the loan will obviously be transferred to Citi at a rate in the 2% range.
I also found an article (link below) that shows M
elnyk was using his personal assets to secure the old Senators financing, and not as many have suggested taking from the team to finance other interests.
http://www.marketwired.com/press-release/eugene-melnyk-completes-150-million-refinancing-1779216.htm