WFF-WBBF North America

[Mike Glass-USA]

From: "Cara Lavender" <clavender@arp-ink.com>
To: <GJValentino@aol.com>
Subject: from Steve
Date: Mon, 5 Feb 2007 12:10:15 -0500

THESE ARE THE OLYMPIA PEOPLE

AMI DEFAULT LOOMS
By KEITH J. KELLY
February 5, 2007 -- American Media Inc., owner of the National Enquirer and Star, was fighting for its very survival last week, negotiating with bankers to avoid falling into default as its debt continues to swell.
The discussions with bankers came as AMI on Friday released preliminary financial data that show that AMI's financial health continues to deteriorate and that it will need another waiver from its bankers in order to avoid defaulting on its loans.
According to the data, which was included in a filing with the Securities and Exchange Commission, AMI's debt in the final three months of 2006 ballooned to 10.45 times its estimated cash flow. Loan terms call for that number to be no higher than 8.85 times cash flow.
The company, which has about $1 billion in long-term debt, also warned that "it may not be able to meet its obligations under its senior credit facility."
The company, which is led by CEO David Pecker, hopes to gets its long-delayed financial restatements filed by Feb. 15, but conceded that unless it gets a waiver from the banks it may be difficult for the accounting firm Deloitte & Touche to give the company's books a clean bill of health.
The company told bankers Friday that it was looking to wring out $19.4 million in new cost savings.