American Media Cuts Its Debt By $200 Million

amilogo07062010.pngAmerican Media — the company behind celebrity magazines Star and the National Enquirer, as well as fitness titles like Shape and Muscle and Fitness, has announced that it has chopped its debt burden by $200 million.

The company said it has reached an agreement with 90% of its bondholders to swap bonds for common stock. “I am very grateful to our bondholders for having the confidence and faith in AMI to consummate this transaction,” said American Media chairman, president and CEO David J. Pecker in a statement. The company said that the agreement has improved its financial flexibility, netting free cash flow of $50 million and reducing the company’s leverage to 5.1x from 7.2x.

In early 2009, American Media struck a deal with bondholders to help it avoid Chapter 11 bankruptcy.

(h/t Folio:)