Gray Television amends loan, delays annual report

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Gray Television announced a deal with its senior lenders to amend its senior credit facility to give the company some breathing room. Because of those now-concluded negotiations, Gray has informed the SEC that its annual 10-K filing will be a bit delayed.


“We are pleased to have the support of our lenders in amending our senior credit facility. This amendment provides additional flexibility to improve our capital structure, and to strategically access the capital markets, subject to market and other conditions, to enable us to repay existing obligations, and strengthens our position as we move forward in these challenging economic conditions,” said Gray President and COO Bob Prather.

Among other things, the company said, the senior credit facility amendment increases Gray’s flexibility under the maximum total net leverage ratio covenant with which it must comply, immediately setting the leverage ratio at 9.00 for the quarter ending March 31, 2010, and also reduces the lenders’ revolving commitments thereunder from $50.0 million to $40.0 million. In addition, the amendment provides Gray with additional flexibility to issue certain debt securities, with the proceeds thereof to be used to repay outstanding amounts under the senior credit facility.

“Pursuant to the amendment, from and after the time the Company completes a new debt issuance and repays at least $200.0 million of existing obligations under the senior credit facility, the Company would obtain further operating and financial flexibility, including the elimination of the requirement to comply with the total net leverage ratio covenant, which will be replaced with a first lien leverage test and a minimum fixed charge coverage ratio, and the elimination or reduction of certain additional fees paid by the Company under the senior credit facility as amended,” the statement from Gray explained about the new amendment.

According to its SEC filing, Gray was in compliance with its debt covenants as of the end of 2009. However, the company said it anticipated that it would not be able to meet a leverage step-down – from 8.5 times to 7.0 times – which had been scheduled to take effect on Wednesday, March 31st. As noted above, the amendment signed on that very day changed the leverage ratio to 9.0 times.

Gray told the SEC its 10-K will be filed as soon as practicable, but no more than 15 days after the scheduled due date. The company reiterated its previous guidance that 2009 revenues will be $270.3 million, down from $327.2 million in 2008.