Gray TV Seeks Credit Facility Refi


Updated on Jan. 23 at 12:15 p.m. Eastern to reflect an error in reporting that connected the revolving credit facility to Gray’s bondholders. Gray is not seeking to refinance its bonds, as this is a senior credit facility. Bondholders are not being asked to do anything in this matter. RBR + TVBR regrets the error.

Gray Television has submitted a proposal that would refinance and extend the maturity date of its revolving credit facility and term loan under its existing senior credit facility.

Gray-TelevisionAt the same time, the broadcast TV industry giant updated it Q4 2016 guidance.

First, the proposal in which Gray expects to refinance or extend its existing indebtedness through some or all of the following:

  • Extension of its revolving credit facility to February 2022, from the current July 2020 maturity and an increase in aggregate commitments to $100 million from the current $60 million
  • Extension of the existing $556.4 million term loan maturity to February 2024, from the current June 2021 maturity.

Wells Fargo Bank N.A. is the administrative agent under our Senior Credit Facility.

Why the request? Gray gives some background by noting that on Tuesday (1/17), it completed its all-cash $270 million acquisition of two Media General O&Os — ABC affiliate WBAY-TV in Green Bay, Wisc., and NBC affiliate KWQC-TV in Davenport (Quad Cities), Iowa. This deal was necessitated from Media General’s merger acquisition with Nexstar, as the Department of Justice ordered Media General to sell the stations to comply with FCC media ownership restrictions in DMAs.

Additionally, on Jan. 13, Gray acquired in all-cash deals three Fairbanks, Alaska, TV stations from Tanana Valley Television Co. and Chena Broadcasting Co., for $8 million.

It now likely seeks to refill its coffers — perhaps for additional acquisitions.

Meanwhile, Moody’s Investors Service assigned a Ba1 (LGD1) rating to Gray’s proposed $100 million senior secured 1st lien priority revolving credit facility and a Ba2 (LGD 2) to the company’s proposed $556 million 1st lien term loan B.

The proceeds from the offering will be used to replace the company’s existing revolver and repay its existing term loan.

“Despite both facilities having a first lien on the company’s assets, the revolving credit facility is rated one notch higher than the term loan given its first priority claim,” Moody’s says. “This is in line with the current secured debt ratings. We expect the transaction to favorably improve the company’s maturity profile by extending the redemption date of the revolver by two years and the term loan by three. All other ratings are unchanged and the outlook remains stable.”


Gray’s updated Q4 guidance now calls for revenue (less agency commissions) to fall between $237,000 and $238,000 — representing 40% growth from the same period in 2015.

However, broadcast operating expenses are now expected to fall between $128k and $129k — representing a 26%-27% gain.

Meanwhile, those all-important political dollars are expected to land between $48,250,000 and $48,750,000.

The revised revenue, broadcast operating expense and political advertising revenue ranges each slightly exceed the previous high-side revenue estimate of $237 million, broadcast operating expense estimate of $127.5 million, and political advertising revenue estimate of $48 million, respectively.

The corporate and administrative operating expense high-side range is unchanged at $9 million.

Meanwhile, Gray revealed that its total leverage ratio is between 5.5x and 5.7x.

Gray now owns and/or operates 100 TV stations across 54 markets, with representation by all Big Four networks.