Scripps announces a series of transactions to refinance its revolver and 2026, 2028 term loans

Rhea-AI Summary

E.W. Scripps (NASDAQ: SSP) has announced significant refinancing transactions to restructure its debt obligations. The company has secured agreements with lenders representing over 70% of its outstanding term loans due in 2026 and 2028. The refinancing package includes:

- Repayment or extension of up to $1.3 billion of existing term loans
- A new $450 million accounts receivable securitization facility
- A new $208 million revolving credit facility due July 2027

The transactions will result in no existing B-2 term loans remaining outstanding, with existing B-3 term loans being subordinated to new loans. The company expects to complete these transactions by April 2025, aiming to strengthen its balance sheet and support strategic initiatives.

Positive

• Secured agreement with over 70% of term loan holders, indicating strong lender support
• Extended debt maturities to 2027-2029, improving financial flexibility
• New $450M accounts receivable securitization facility provides additional liquidity
• Successful restructuring of $1.3B in debt obligations

Negative

• Existing B-3 term loans will be subordinated to new loans, potentially affecting some lenders
• Complex refinancing structure indicates potential underlying financial pressure
• Increased debt complexity with multiple new facilities and terms

Insights

Financial Analyst

Scripps has successfully secured a comprehensive refinancing package that addresses its near-term debt maturities - a critical development considering the company's $1.3 billion term loan obligations compared to its $129 million market capitalization. The transaction includes:

1) Exchange of existing B-2 term loans (due May 2026) for new loans maturing in June 2028

2) Exchange of existing B-3 term loans for a combination of new debt maturing in 2028 and 2029

3) A new $450 million accounts receivable securitization facility

4) A new $208 million revolving credit facility extending to July 2027

The refinancing's most significant achievement is eliminating all existing B-2 term loans that were due in 2026, effectively pushing maturities further into the future and creating breathing room for operational improvements. This debt restructuring doesn't reduce Scripps' overall leverage but rather buys critical time to execute strategic initiatives.

With lenders representing 70% of term loan principal already supporting this agreement, the company has demonstrated creditor confidence in its transformation strategy despite its challenged financial position. The April completion timeline indicates a well-organized process with strong lender backing.

This refinancing addresses a key near-term financial risk by extending maturities and maintaining liquidity, enabling management to focus on operational improvements rather than immediate debt repayment concerns.

Credit Analyst

This refinancing represents a significant positive development for Scripps' credit profile, particularly given the company's substantial debt burden relative to its $129 million market capitalization. The transaction addresses the most pressing maturity wall by completely eliminating the B-2 term loans due in 2026 through a combination of exchanges and partial repayments.

The debt restructuring creates a more manageable maturity ladder with obligations now extending to 2028 and 2029. Importantly, the subordination of any remaining B-3 loans strengthens the position of the new debt instruments, potentially reducing refinancing risk for those facilities in the future.

The new $450 million accounts receivable securitization provides an alternative financing mechanism that likely offers more favorable terms than the existing debt, while the $208 million revolving facility extension ensures ongoing liquidity through mid-2027.

What's particularly notable is securing this refinancing despite the challenging credit environment and Scripps' own financial condition. Gaining support from 70% of existing lenders signals creditor confidence in management's strategic direction, though execution of operational improvements remains critical.

While this transaction doesn't reduce overall leverage, it significantly decreases near-term default risk by extending maturities and maintaining adequate liquidity. This creates a viable runway for the company to pursue its transformation initiatives without imminent refinancing pressure.

CINCINNATI, March 11, 2025 /PRNewswire/ -- The E.W. Scripps Company (NASDAQ: SSP) has entered into a transaction support agreement (TSA) with lenders representing more than 70% of the aggregate principal amount of Scripps' outstanding tranche B-2 term loans due May 2026 and tranche B-3 term loans due June 2028. The company has also entered into commitment letters with accounts receivable securitization providers for a new A/R securitization facility and its revolving banks to extend a portion of its revolving credit facility through July 2027. These transactions will provide Scripps the runway and liquidity to continue the progress of its strategic and operating initiatives. 

The transactions include:

• Repayment or extension of up to $1.3 billion of existing term loans
  The initial consenting lenders holding existing B-2 term loans will exchange certain of their existing B-2 term loans (not otherwise repaid as part of these transactions) for new B-2 term loans due June 2028 and initial consenting lenders holding existing B-3 term loans will exchange their existing B-3 term loans for a combination of new B-2 term loans and new B-3 term loans due November 2029.
    
• New committed financings to support successful execution of the transactions
  The company executed commitment letters with new lenders to provide for a $450 million accounts receivable securitization facility, with a portion of such proceeds used to partially repay the existing B-2 term loans and certain initial consenting holders to provide new B-2 term loans, the proceeds of which will be used for cash repayment of any existing B-2 term loans not exchanged or repaid with the proceeds of the accounts receivable securitization facility.
    
• Commitment to enter into a new revolving credit facility to support go-forward liquidity
  The company executed a commitment letter with certain existing lenders to provide a new $208 million revolving credit facility due July 2027. The new revolving credit facility will extend and substantially replace a portion of the company's existing revolving credit facility, with the remaining committed amount of the existing revolver still available for draw.

All holders of existing B-2 term loans and existing B-3 term loans will be offered the opportunity to exchange their term loans for new B-2 term loans and/or new B-3 term loans, as applicable.

Following the transactions, no existing B-2 term loans will remain outstanding. Existing B-3 term loans that remain outstanding after the transaction will be subordinated in right of payment to the new B-2 term loans, new B-3 term loans, new revolving credit facility and non-extended revolving credit facility. The company expects to complete the transactions by April.

"Our agreement includes a series of actions to transform Scripps' balance sheet and strengthen our ability to implement key strategic initiatives that support our ongoing transformation," Scripps Chief Financial Officer Jason Combs said. "We are grateful for the broad-based support from our existing and new investors that contributed to this attractive refinancing. As we move forward, we remain focused on improving the company's operating performance, managing our debt and positioning the company for the future."

The company will file a Form 8-K with the Securities and Exchange Commission that will contain further details regarding the terms of the transactions. The foregoing descriptions of the transactions do not purport to be complete and are qualified in their entirety by reference to the Form 8-K and TSA.

Simpson Thacher & Bartlett LLP served as counsel and Perella Weinberg Partners served as financial advisor to the company. Davis Polk & Wardwell LLP served as counsel and Moelis & Company LLC served as financial advisor to an ad hoc group of certain of the initial consenting holders. Cahill Gordon & Reindel LLP acted as counsel to JPMorgan Chase Bank, N.A., as left lead arranger with respect to the new revolving credit facility. Mayer Brown LLP served as counsel to PNC Bank, National Association, as administrative agent and a lender with respect to the new accounts receivable securitization facility. Orrick Herrington & Sutcliffe LLP served as counsel to KKR Credit Advisors (US) LLC, on behalf of itself, certain of its affiliates and its or their managed funds and accounts, as a lender with respect to the new accounts receivable securitization facility.

This press release is not intended to be, and does not constitute, an offer to sell, buy or subscribe for any securities or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this communication is not an offer of securities for sale into the United States or any other jurisdiction. No offer of securities shall be made absent registration under the Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.

Forward-looking statements
This document contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "believe," "anticipate," "intend," "expect," "estimate," "could," "should," "outlook," "guidance," and similar references to future periods. Examples of forward-looking statements include, among others, statements the company makes regarding expected operating results and future financial condition. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management's current beliefs, expectations, and assumptions regarding the future of the industry and the economy, the company's plans and strategies, anticipated events and trends, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties, and changes in circumstance that are difficult to predict and many of which are outside of the company's control. The company's actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause the company's actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: change in advertising demand, fragmentation of audiences, loss of affiliation agreements, loss of distribution revenue, increase in programming costs, changes in law and regulation, the company's ability to identify and consummate strategic transactions, the controlled ownership structure of the company, and the company's ability to manage its outstanding debt obligations. These statements include, but are not limited to, statements related to the transactions described above, including the company's ability to complete any of the transactions on the terms contemplated by the TSA (and related commitment letters), on the timeline contemplated or at all, and the company's ability to realize the intended benefits of any such transactions.

A detailed discussion of such risks and uncertainties is included in the company's Form 10-K, on file with the SEC, in the section titled "Risk Factors." Any forward-looking statement made in this document is based only on currently available information and speaks only as of the date on which it is made. The company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

Media contact: Becca McCarter, The E.W. Scripps Company, (513) 410-2425, rebecca.mccarter@scripps.com
Investor contact: Carolyn Micheli, The E.W. Scripps Company, (513) 313-5910, carolyn.micheli@scripps.com

About Scripps
The E.W. Scripps Company (NASDAQ: SSP) is a diversified media company focused on creating a better-informed world. As one of the nation's largest local TV broadcasters, Scripps serves communities with quality, objective local journalism and operates a portfolio of more than 60 stations in 40+ markets. Scripps reaches households across the U.S. with national news outlets Scripps News and Court TV and popular entertainment brands ION, ION Plus, ION Mystery, Bounce, Grit and Laff. Scripps is the nation's largest holder of broadcast spectrum. Scripps is the longtime steward of the Scripps National Spelling Bee. Founded in 1878, Scripps' long-time motto is: "Give light and the people will find their own way."

View original content to download multimedia:https://www.prnewswire.com/news-releases/scripps-announces-a-series-of-transactions-to-refinance-its-revolver-and-2026-2028-term-loans-302398965.html

SOURCE The E.W. Scripps Company

FAQ

What is the total value of debt being refinanced in Scripps' (SSP) March 2025 transaction?

Scripps is refinancing up to $1.3 billion of existing term loans through various transactions including exchanges and new facilities.

When will Scripps (SSP) complete its 2025 debt refinancing transactions?

Scripps expects to complete the refinancing transactions by April 2025.

What is the size of Scripps' (SSP) new revolving credit facility and when does it mature?

Scripps secured a new $208 million revolving credit facility that matures in July 2027.

How much is Scripps' (SSP) new accounts receivable securitization facility worth?

Scripps secured a $450 million accounts receivable securitization facility as part of the refinancing.

What percentage of Scripps' (SSP) lenders have agreed to the refinancing plan?

Lenders representing more than 70% of Scripps' outstanding tranche B-2 and B-3 term loans have agreed to the transaction.