Salem Media Group Announces New Revolving Credit Facility with Siena Lending Group

Rhea-AI Summary

Salem Media Group, Inc. (NASDAQ: SALM) closed a new $26.0 million 3-year asset-based revolving credit facility with Siena Lending Group, refinancing its prior facility with Wells Fargo Bank.

Insights

Financial Analyst

Salem Media Group's closure of a new $26.0 million 3-year asset-based revolving credit facility with Siena Lending Group signifies a strategic financial restructuring. This transaction replaces the previous arrangement with Wells Fargo Bank, which may imply a search for more favorable borrowing terms or covenants. It's important to analyze the interest rates, loan covenants and repayment terms to assess the potential impact on Salem's liquidity and financial flexibility.

The security package, involving first-priority liens on high-liquidity assets such as accounts receivable and inventory, suggests a conservative lending approach by Siena Lending Group. This may affect the company's ability to secure additional financing in the future, as major assets are now collateralized. Stakeholders should monitor the company's subsequent financial statements for changes in interest expenses and any potential influence on net income.

Market Research Analyst

The refinancing move by Salem Media Group may signal to the market that the company is actively managing its balance sheet, which could be interpreted as a positive indicator of the management's financial prudence. However, the impact on the stock price will depend on investor perception of the credit facility's terms relative to industry norms. If the terms are considered favorable, it might lead to a more positive outlook on the company's risk profile.

Additionally, the shift from a major bank to a specialized lending group could be indicative of a niche financial strategy, aligning with specific business needs that may not be as effectively met by traditional banking services. Understanding the strategic fit of this move within the broader industry context is key to evaluating its potential success.

Legal Expert

The legal implications of the new credit facility for Salem Media Group involve the structuring of liens on the company's assets. A first-priority lien gives Siena Lending Group a preferential claim over the specified collateral in the event of default, which can significantly influence the company's legal standing and financial strategy. Stakeholders should consider the possibility of restrictive covenants that could limit corporate actions such as asset sales or further borrowing.

It is also crucial to understand the legal framework governing asset-based lending, as it can affect the company's operational flexibility. The legal terms of the credit agreement, especially regarding the second-priority lien on other assets, will play a critical role in shaping the company's strategic decision-making process.

IRVING, Texas--(BUSINESS WIRE)-- Salem Media Group, Inc. (NASDAQ: SALM) announced today that it has closed a new $26.0 million 3-year asset-based revolving credit facility with Siena Lending Group (the “New Revolving Facility”), which refinanced its prior revolving facility with Wells Fargo Bank.

Obligations under the New Revolving Facility are secured by a first-priority lien on the Company’s and its subsidiaries’ accounts receivable, inventory, deposit and securities accounts, certain real estate and related assets, and a second-priority lien on substantially all other assets of the Company and its subsidiaries.

FORWARD LOOKING STATEMENTS:

Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to our ability to close and integrate announced transactions, market acceptance of our radio station formats, competition from new technologies, inflation and other adverse economic conditions, and other risks and uncertainties detailed from time to time in our reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

ABOUT SALEM MEDIA GROUP:

Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231226399648/en/

Company Contact:

Evan D. Masyr

Executive Vice President and Chief Financial Officer

(805) 384-4512

evan@salemmedia.com

Source: Salem Media Group, Inc.

FAQ

What did Salem Media Group announce?

Salem Media Group, Inc. (NASDAQ: SALM) announced the closure of a new $26.0 million 3-year asset-based revolving credit facility with Siena Lending Group, refinancing its prior facility with Wells Fargo Bank.

With whom did Salem Media Group close the new credit facility?

Salem Media Group closed the new credit facility with Siena Lending Group.

What are the details of the new credit facility?

The new credit facility is worth $26.0 million and has a 3-year term. It is asset-based and secured by a first-priority lien on the Company’s and its subsidiaries’ accounts receivable, inventory, deposit and securities accounts, certain real estate and related assets, and a second-priority lien on substantially all other assets of the Company and its subsidiaries.