Gray Announces Closing of Term Loan and Revolving Credit Facility Refinancing
Gray Television (NYSE: GTN) announced the completion of its refinancing efforts, including a $1.15 billion term loan due in 2026 and the upsizing of its revolving credit facility. The refinancing deal introduces a new $500 million tranche F term loan with a maturity date of June 4, 2029. Aggregate commitments under the existing $552.5 million tranche of the revolving credit facility, maturing December 31, 2027, have been increased by $127.5 million, resulting in total commitments of $680 million. The separate commitments under a $72.5 million tranche of the revolving credit facility maturing on December 1, 2026, have been terminated. Gray's next significant debt maturity is now set for May 2027. The company has also increased and extended its revolver capacity to $680 million, with a new maturity date of December 31, 2027.
- Refinancing introduces a new $500 million tranche F term loan maturing in 2029.
- Aggregate commitments under the revolving credit facility increased to $680 million.
- Gray's next significant debt maturity is pushed to May 2027.
- Extension of the revolver's maturity date to December 31, 2027.
- Increased financial flexibility due to the upsized revolving credit facility.
- Termination of a $72.5 million tranche in the revolving credit facility.
- Potential risks from refinancing large debt amounts.
Insights
The refinancing and upsizing of Gray Television's term loan and revolving credit facility have significant implications for the company's financial health and operational flexibility. Refinancing the $1.15 billion term loan to a new $500 million tranche due in 2029 extends the debt maturity, providing Gray with more time to manage its liabilities. This move helps in reducing the immediate pressure of debt repayment, aligning maturities with the political cycles, which is important for a television company reliant on political advertising revenue.
Moreover, the increased aggregate commitments under the revolving credit facility from $552.5 million to $680 million enhance Gray’s liquidity, offering a robust safety net for unforeseen expenses and potential investments. This extended revolving credit facility maturity to December 2027 ensures the company has access to capital for operational needs over a longer period, reducing financial risk. The termination of the $72.5 million tranche simplifies the debt structure, making it more manageable. Investors should note that while these changes improve short-term liquidity and extend debt maturity, the company's overall leverage remains high, necessitating continuous monitoring of debt levels and interest expenses.
Gray Television's refinancing indicates strategic financial management, aiming to improve cash flow and operational stability. The action aligns with the company's operational timelines, particularly around the political cycle, where advertising revenues spike. By extending the maturities, Gray positions itself to capitalize on these peak revenue periods, ensuring cash is available when needed most.
The increased revolving credit facility enhances the company's ability to invest in strategic initiatives or acquisitions, supporting growth and competitive positioning. The changes reflect proactive measures in anticipation of potential market dynamics, such as fluctuating advertising revenues or economic downturns, which could impact liquidity. However, investors must consider the implications of sustained high debt levels, which can pose risks if market conditions deteriorate. The company's ability to generate consistent cash flow and manage interest expenses effectively remains critical for long-term financial health.
ATLANTA, June 04, 2024 (GLOBE NEWSWIRE) -- Gray Television, Inc. (“Gray” or the “Company”) (NYSE: GTN) announced today that it has closed a refinancing of its
The refinancing, among other things, provides a new
With the completion of these refinancing efforts, Gray’s next debt maturity is expected to occur following the 2024 and 2026 political cycles, when its
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. Its television stations serve 114 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 79 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.
Gray Contacts:
Jim Ryan, Executive Vice President and Chief Financial Officer, 404-504-9828
Jeff Gignac, Executive Vice President, Finance, 404-504-9828
Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, 404-266-8333
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FAQ
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