Gray Announces Closing and Upsizing of Revolving Credit Facility Refinancing and Announces Update on Term Loan and BMI Sale Proceeds

Rhea-AI Summary

Gray Television, Inc. (GTN) closes refinancing and upsizing of revolving credit facility, postpones term loan refinancing, and receives $110 million in pre-tax cash proceeds from the sale of Broadcast Music, Inc. Gray upsized its revolving credit facilities to $625 million due to strong demand.

Financial Analyst

The refinancing and upsizing of Gray Television's revolving credit facility is a strategic financial maneuver that indicates the company's proactive approach to capital management. The increase from $500 million to $625 million provides Gray with a larger liquidity buffer, which can be critical in navigating uncertain market conditions. This move also suggests a vote of confidence from the banking group, which has agreed to the amendment and extension of the facility's maturity dates. It's important to note that the postponement of the term loan refinancing could signal a cautious approach in the face of less favorable borrowing terms or market volatility. Investors should consider how these changes affect the company's interest expenses and debt covenants, as well as their overall financial flexibility.

Market Research Analyst

Gray Television's sale of Broadcast Music, Inc. for $110 million in pre-tax cash proceeds represents a significant liquidity event for the company. It is essential to understand the context within which this divestiture occurs. The media industry is experiencing consolidation and transformation, driven by changing consumer behaviors and technological advancements. This sale could be a strategic move to streamline operations and focus on core competencies. From a market perspective, the injection of cash might be utilized for further investment in growth areas or to reduce existing debt, thereby potentially improving the company's risk profile and attractiveness to investors.

Debt Market Expert

The postponement of the opportunistic refinancing of Gray's $1.19 billion term loan suggests a response to unfavorable market conditions, possibly higher interest rates or reduced investor appetite for corporate debt. This decision highlights the importance of timing and market sentiment in the debt refinancing process. For stakeholders, it's critical to monitor the company's future moves regarding this term loan, as the terms of refinancing could significantly impact Gray's interest obligations and overall financial health. The upsizing of the revolving credit facility may offset some immediate concerns, but the long-term implications of the term loan's current status warrant close observation.

ATLANTA, Feb. 16, 2024 (GLOBE NEWSWIRE) -- Gray Television, Inc. (“Gray,” “we,” “us” or “our”) (NYSE: GTN) announced today that it has closed a refinancing and upsizing of its revolving credit facility and has postponed its planned opportunistic refinancing of its $1.19 billion term loan due in 2026, due to recent market conditions. In addition, Gray announced today that, on February 8, 2024, Gray received approximately $110 million in pre-tax cash proceeds from the closing of the previously announced sale of Broadcast Music, Inc. (“BMI”) to a shareholder group led by New Mountain Capital, LLC.  

On January 30, 2024, Gray launched a process, subject to market and other conditions, to refinance a portion of its existing senior credit facilities. Subsequent developments in the capital markets led Gray to postpone the process through which it intended to amend certain terms and extend the maturity of its $1.19 billion term loan.

Despite such developments, Gray’s banking group continued to support the company in amending and extending its $500 million revolving credit facility. In fact, due to strong demand, Gray upsized its revolving credit facilities to $625 million, which includes a new $552.5 million revolving credit facility maturing on December 31, 2027 and $72.5 million facility maturing on December 1, 2026.

Gray paid transaction fees and expenses in cash at closing. We currently have no amounts drawn on our revolving credit facilities.

About Gray:

Gray Television, Inc. is a multimedia company headquartered in Atlanta, Georgia. Gray is the nation’s largest owner of top-rated local television stations and digital assets in the United States. Its television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 80 markets with the top-rated television station and 102 markets with the first and/or second highest rated television station. Gray also owns video program companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, as well as the studio production facilities Assembly Atlanta and Third Rail Studios. Gray owns a majority interest in Swirl Films. For more information, please visit www.gray.tv.

Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act

This press release contains certain forward-looking statements that are based largely on Gray’s current expectations and reflect various estimates and assumptions by Gray. These statements are statements other than those of historical fact, and may be identified by words such as “estimates,” “expect,” “anticipate,” “will,” “implied,” “assume” and similar expressions. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond Gray’s control. Gray is subject to additional risks and uncertainties described in Gray’s quarterly and annual reports filed with the Securities and Exchange Commission from time to time, including in the “Risk Factors,” and management’s discussion and analysis of financial condition and results of operations sections contained therein, which reports are made publicly available via its website, www.gray.tv. Any forward-looking statements in this communication should be evaluated in light of these important risk factors. This press release reflects management’s views as of the date hereof. Except to the extent required by applicable law, Gray undertakes no obligation to update or revise any information contained in this communication beyond the date hereof, whether as a result of new information, future events or otherwise.

Gray Contacts:

Jim Ryan, Executive Vice President and Chief Financial Officer, 404-504-9828
Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, 404-266-8333

What did Gray Television, Inc. announce regarding its credit facilities?

Gray Television, Inc. announced the closing of a refinancing and upsizing of its revolving credit facility and postponed its planned opportunistic refinancing of its $1.19 billion term loan due to recent market conditions.

How much pre-tax cash proceeds did Gray receive from the sale of Broadcast Music, Inc.?

Gray received approximately $110 million in pre-tax cash proceeds from the closing of the sale of Broadcast Music, Inc. to a shareholder group led by New Mountain Capital, LLC.

What led Gray to postpone the refinancing process of its term loan?

Subsequent developments in the capital markets led Gray to postpone the process through which it intended to amend certain terms and extend the maturity of its $1.19 billion term loan.

How much did Gray upsize its revolving credit facilities to?

Gray upsized its revolving credit facilities to $625 million, which includes a new $552.5 million revolving credit facility maturing on December 31, 2027 and $72.5 million facility maturing on December 1, 2026.

Are there any amounts currently drawn on Gray's revolving credit facilities?

Gray currently has no amounts drawn on its revolving credit facilities.