Sinclair Closes Partial Refinancing and Extension of STG Credit Facilities

Rhea-AI Summary

Sinclair Broadcast Group (Nasdaq: SBGI) announced that its subsidiary, Sinclair Television Group, has executed a Third Amendment to its Seventh Amended Credit Agreement. This amendment extends the maturity of a portion of its term loan B-1 tranche due January 3, 2024. Sinclair incurred new term loans totaling $740 million to partially refinance the existing debt. These new loans will mature on April 1, 2028, with interest rates at LIBOR plus 3.00% or base rate plus 2.00%. This amendment reflects Sinclair's ongoing financial strategy amidst various operational risks and market uncertainties.

Positive

• Successfully extended the maturity of existing term loans, improving cash flow flexibility.
• Incurring new term loans of $740 million aids in refinancing existing debt, potentially reducing financial strain.

Negative

• Continued financial uncertainties due to COVID-19 pandemic affecting advertising revenue and operations.
• High levels of indebtedness pose risks to cash generation and financial stability.

Sinclair Broadcast Group, Inc. (“Sinclair” or the “Company”) (Nasdaq: SBGI) announced today that its wholly-owned subsidiary, Sinclair Television Group, Inc. (“STG”), has entered into the Third Amendment (“Third Amendment”) to its Seventh Amended and Restated Credit Agreement, dated as of August 23, 2019, as amended with JPMorgan Chase Bank, N.A., as administrative agent, the guarantors party thereto and the lenders and other parties thereto, to, among other things, effect an extension of the maturity of a certain portion of its existing term loan B-1 tranche, which has a maturity date of January 3, 2024. Pursuant to the Third Amendment, STG incurred new term loans in an aggregate principal amount of $740 million, certain of the proceeds of which term loans are being used to partially refinance the existing term loan B-1 tranche. The new term loans will mature on April 1, 2028 and will bear interest, at the option of STG, at LIBOR (or successor rate) plus 3.00% or at base rate plus 2.00%.

This description of the Third Amendment is only a summary, and is qualified in its entirety by reference to the complete amendment, a copy of which will be filed today with the Securities and Exchange Commission (“SEC”) as an exhibit to a Current Report on Form 8-K.

Forward-Looking Statements:

The matters discussed in this news release include forward-looking statements regarding, among other things, future events and actions. When used in this news release, the words “outlook,” “intends to,” “believes,” “anticipates,” “expects,” “achieves,” “estimates,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including and in addition to the assumptions set forth therein, but not limited to: STG’s ability to consummate the proposed amendment and extension of certain loans under its credit facility; the potential impacts of the COVID-19 pandemic on our business operations, financial results and financial position and on the world economy, including the significant disruption to the operations of the professional sports leagues, need to provide rebates to our distributors related to canceled professional sporting events, and loss of advertising revenue due to postponement or cancellation of professional sporting events, and reduced consumer spending as a result of shelter in place and stay at home orders; our ability to generate cash to service our substantial indebtedness; successful execution of outsourcing agreements; the successful execution of retransmission consent agreements; the successful execution of network affiliation and distribution agreements; the successful execution of media rights agreements with professional sports teams; the impact of OTT and other emerging technologies and their potential impact on cord-cutting; the impact of distributors offering "skinny" programming bundles that may not include all programming of our networks; pricing and demand fluctuations in local and national advertising; volatility in programming costs; the market acceptance of new programming; our ability to identify and consummate acquisitions and investments, to manage increased leverage resulting from acquisitions and investments, and to achieve anticipated returns on those investments once consummated; the impact of pending and future litigation claims against the Company; the impact of FCC and other regulatory proceedings against the Company, uncertainties associated with potential changes in the regulatory environment affecting our business and growth strategy; and any risk factors set forth in the Company's recent reports on Form 10-Q and/or Form 10-K, as filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210401005893/en/

FAQ

What is the significance of the Third Amendment for Sinclair Broadcast Group (SBGI)?

The Third Amendment extends the maturity of part of Sinclair's term loan, enhancing cash flow management.

How much did Sinclair incur in new term loans in the recent amendment?

Sinclair incurred $740 million in new term loans as part of the Third Amendment.

What are the new loan maturity dates for Sinclair's term loans?

The new term loans will mature on April 1, 2028.

What are the interest rates for the new term loans issued by Sinclair?

The new term loans bear interest at LIBOR plus 3.00% or at base rate plus 2.00%.

What risks are associated with Sinclair's financial outlook post-amendment?

Risks include ongoing impacts from COVID-19, high indebtedness, and uncertainties related to advertising revenue.