New Hampshire Will Bailout Failing Newspaper

From the Nashua Telegraph:

The state of New Hampshire last week agreed to guarantee 75 percent of a $250,000 loan from an Upper Valley bank to the new owner of the Eagle Times, an unusual deal because it involves a daily newspaper and the government it covers.

The Executive Council on Wednesday unanimously approved without debate the “working capital loan guarantee,” which would be administered by the New Hampshire Business Finance Authority.

Under the deal, the BFA and the state would be liable to pay up to $187,500 to Connecticut River Bank if Eagle Printing & Publishing LLC defaulted on the $250,000 line of credit it would receive from the bank.

Eagle Printing is the entity created by a small Pennsylvania-based newspaper chain which bought the Eagle and a handful of weekly papers out of bankruptcy in September.

The loan from the Charlestown-based bank, which has had ties to the Eagle’s previous owner and publisher, has not yet been finalized but is expected to close this week, according to Mike Donahue, a senior credit officer at the BFA.

“We were approached by the bank to provide a guarantee for a business they felt was going to have some success, and hire back some jobs that are critical to the area,” Donahue said in an interview Friday. “We agreed with the bank’s assessment, and we agreed to present it to the governor and council.”

The loan would include an initial interest rate of 4.99 percent for the first year, and then be adjusted monthly to equal the prime rate plus 1.25 percent, according to a BFA summary of the deal.

“The Loan proceeds are to be used by Eagle Printing & Publishing LLC to provide working capital support for its distributing operations,” the summary stated.

Read the whole thing here. Of course, we don’t expect this to impact the paper’s coverage of New Hampshire state government. No word on whether New Hampshire will change its moto to “Live Free or Die…or get a government bailout.”